If you have more than one property, you can use both averaging and period of grace elections to make sure that a property continues to qualify as a FHL. Example Emma has 4 cottages that she lets as furnished holiday lettings. In some years cottage 3 does not meet the letting condition.
Year 1Year 2Year 3Year 4Year 5 Cottage 1QualifiesQualifiesQualifiesQualifiesQualifies Cottage 2QualifiesQualifiesQualifiesQualifiesQualifies Cottage 3QualifiesAveragingPeriod of gracePeriod of graceQualifies Cottage 4QualifiesQualifiesQualifiesQualifiesQualifies Emma uses averaging in year 2 and period of grace in year 3 and 4 to make sure that cottage 3 qualifies for the whole period.