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Invest in a UK country home for sale with a holiday business attached

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Being the owner of a holiday letting business or guest house in Britain has been a financially depressing state of affairs during the past year.

Repeated lockdowns mean that bookings have had to be postponed or cancelled while people stay at home, barring a surge when the economy was opened up last summer.

But has Boris Johnson‘s plans for the lifting of the latest lockdown changed all of that?

With holidays overseas still on hold, the staycation market has been given a massive boost by the announcement that these holidays are set to be allowed from the middle of April.

This Yorkshire Dales guest house generated an income for July, August and September last year of £83,300 including VAT (more details and pictures below)

This Yorkshire Dales guest house generated an income for July, August and September last year of £83,300 including VAT (more details and pictures below)

Staycation giant Awaze, the owner of UK self-catering company Cottages.com, said it sold a record 10,000 breaks on February 22 – the day that the roadmap out of lockdown was announced. 

Camping site Pitchup.com, meanwhile, took one booking every seven seconds in a 24 hour period during the week of the roadmap announcement.

And Habitat Escapes, which offers luxury holiday in the Cotswolds and Dorset, said that within 24 hours of the Prime Minister’s announcement, sales were up 343 per cent compared with the previous week, and a staggering 9,559 per cent up on the same day last year.

At the same time, Rightmove said interest in commercial properties has reached record levels, hitting a new high on Wednesday, February 17.

While this was before the Prime Minister’s roadmap announcement, there was already mounting speculation that he was going to make a statement. 

Rightmove said the second busiest day for the commercial section of its website was the day before on February 20, with all of the top 25 business days for commercial property recorded in January and February this year.

The record for 2020 was set on August 19 when there were 128,021 visits.

A boost for staycations 

The roadmap out of lockdown that was announced by Boris Johnson last week has been welcomed by the British tourism industry.

While it has acknowledged a ‘slow build back’ for tourism at home, it says that the vaccine and roadmap is ‘encouraging’ for the industry. 

Patricia Yates, of VisitBritain/VisitEngland, said: ‘The PM’s roadmap announced on 22 February brought some welcome clarity on time frames for restarting domestic tourism in England and for businesses to start planning towards reopening. 

‘News of the vaccine progress and the July target is particularly encouraging for England’s tourism industry and the millions of jobs and local economies that depend on it, especially coming in the run up to the critical summer season.

‘We have already forecast a slow build back for the sector with domestic tourism spending estimated this year of £61.7 billion compared to £91.6 billion in 2019, and inbound tourism spending of £6.6 billion compared to £28.4 billion in 2019.’

If you’re considering buying a holiday lets business, it is important to do your research thoroughly.

This includes finding out what the business’s revenue, cashflow and profits are – and whether they are sustainable once you take it over. 

Many business do not list these details on their website adverts, preferring to keep them private until they are approached. (Indeed, all bar one that we spoke to retained this information for serious buyers only, once viewings had been carried out.)

This information is particularly sensitive at the moment given many hospitality parts of the economy have been shut for the best part of a year. 

Once you approach the sellers for this information, if they fail to provide plenty of documentary evidence, it may be better to walk away.

Most residential properties with business attached require a commercial mortgage, which require a deposit of around 30 per cent of value of the bricks and mortar, while other lenders will lend up to 65 per cent of the total purchase price – which includes the house as well as the value of the business.

Commercial mortgage rates also tend to be higher than those available on residential deals, at around 4 and 5 per cent.

Most lenders will also want to see some evidence of experience of working in the sector, or relevant business expertise.

So what could you buy? Below is a selection of some residential properties with holiday lets attached.

1. Twelve-bed guest house, Pembrokeshire, £850K 

This beautiful Grade II listed Welsh guest house in Cuffern, Pembrokeshire, is for sale for £850,000

This beautiful Grade II listed Welsh guest house in Cuffern, Pembrokeshire, is for sale for £850,000

The property includes two self-catering cottages, as well as generous owners' accommodation

The property includes two self-catering cottages, as well as generous owners’ accommodation

This Grade II listed house in Cuffern, Pembrokeshire, was built in 1770 and is less than four miles from the beautiful Welsh spot of Newgale beach.

It includes two self-catering cottages, and generous owners’ accommodation. It is for sale for £850,000 via estate agents West Wales Properties.

2. Twelve-bed guest house, North Yorkshire, £925K 

This 12-bed guest house sits in the Yorkshire Dales National Park village of Grassington and is for sale for £925,000

This 12-bed guest house sits in the Yorkshire Dales National Park village of Grassington and is for sale for £925,000

The popular guest house enjoyed a turnover of £155,000 for the year ending March 2020

The popular guest house enjoyed a turnover of £155,000 for the year ending March 2020

This 12-bedroom guest house sits in the Yorkshire Dales National Park village of Grassington, Skipton, and is currently for sale for £925,000 via estate agents Christie & Co.

The main guest house has 10 double bedrooms and is owned freehold by the sellers. There are two further bedrooms in a separate building across the car park that are held on a leasehold basis. 

It had a turnover of £155,000 for the year ending March 2020 and enjoyed a strong summer last year, with income for July, August and September amounting to £83,300 including VAT.

Further information about the accounts can be provided to serious buyers only. 

3. Eleven-bed hotel, Inverness-shire, £895K 

Lime Tree Hotel in Fort William, Inverness-shire, produced a turnover of £483,766 in 2020 and is for sale for £895,000.

Lime Tree Hotel in Fort William, Inverness-shire, produced a turnover of £483,766 in 2020 and is for sale for £895,000.

The property has nine letting bedrooms, as well as income from a gallery, self-catering and evening meals

The property has nine letting bedrooms, as well as income from a gallery, self-catering and evening meals

Lime Tree Hotel in Fort William, Inverness-shire, is a traditional Victorian country property that dates back to 1850. 

It currently has nine letting bedrooms, as well as income from a gallery, self-catering and evening meals.  

The property’s asking price is £895,000 and the sale is being handled by estate agents ASG Commercial.

4. Nine-bed guest house, Devon, £565K 

This nine-bedroom Victorian guest house is in the pretty fishing village of Brixham, in Devon

This nine-bedroom Victorian guest house is in the pretty fishing village of Brixham, in Devon

The large dining room has a bay window and space for seven  tables, and chairs for 14 covers

The large dining room has a bay window and space for seven  tables, and chairs for 14 covers

This nine-bedroom Victorian guest house is in the fishing village of Brixham, Devon, and boasts harbour and sea views. It is for sale for £565,000 via estate agents Ware Commerical.

There is a six-bedroom guest house, as well as a one-bedroom holiday chalet and two-bedroom owners’ accommodation. 

Mortgages for holiday lets 

If you are looking to buy a holiday let and require a mortgage, you will need a specific type of loan aimed at such properties.

One lender offering such deals is Leeds Building Society, which launched two new holiday let products following its biggest month on record for this type of mortgage application in September last year.

In anticipation of growing demand this summer, the lender has expanded its range of holiday let products with two five-year fixed-rate deals with no product fee

They include a five-year fixed-rate mortgage available up to 60 per cent of the value of the property, with a rate of 3.69 per cent.

And separately, there is a five-year fixed-rate mortgage available up to 70 per cent loan-to-value, with a rate of 4.29 per cent.

Matt Bartle, of Leeds Building Society, said: ‘The ongoing uncertainty around international travel restrictions adds to the likelihood that more Britons will be holidaying in the UK this year.

‘We’ve seen increasing demand in holiday let lending in recent years, including by buy-to-let landlords looking to diversify their portfolio.

‘It will be interesting to see if holidaymakers’ habits change once they’ve experienced, or been reminded of, what the UK has to offer, whether for short breaks or longer stays.’

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Japanese knotweed saves £11.8billion off property values  

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Japanese knotweed is responsible for shaving £11.8billion off the value of Britain’s property market, new research by a removal specialist claims.

As many as 4 per cent of British homes are affected by the invasive plant – either on the property itself or on a neighbouring property.

The invasive plant makes homes significantly more difficult to sell as buyers can struggle to secure a mortgage on a property where it is found.

However, Britain’s biggest mortgage lenders told us that is possible to get a mortgage for a home affected by knotweed, but conditions may be imposed.

Japanese knotweed is an invasive plant that makes a property significantly more difficult to sell as buyers

Japanese knotweed is an invasive plant that makes a property significantly more difficult to sell as buyers

Japanese knotweed on a property reduces its value by an average of 5 per cent, according to the figures from removal specialist Environet.

It used that to estimate that with 890,000 households across the county are being hit by a typical reduction of value of £13,200 due to knotweed, this equated to £11.8billion in total.

The plant can be stopped from spreading – although this process can be costly, at around £2,500 for a 10sq m area for a herbicide treatment or £5,000 for a 10 sq m for an excavation.

Environet claims that removing the root system from the ground is the only way to deal with Japanese knotweed decisively with minimal change of regrowth.

It said that despite the lower costs, herbicide treatment is increasingly recognised as a control method only. 

This is because above-ground growth can disappear, but the root system beneath the ground is often induced into dormancy meaning it’s capable of regrowing in the future – particularly if the ground is disturbed by landscaping or building work. 

Environet says removing the root system from the ground is the only way to deal with Japanese knotweed decisively with minimal change of regrowth

Environet says removing the root system from the ground is the only way to deal with Japanese knotweed decisively with minimal change of regrowth

Nic Seal, of Environet, said: ‘Those buying and selling property are legally required to declare if the property is or has been affected by Japanese knotweed, but if an infestation has been professionally excavated with an insurance-backed guarantee to satisfy mortgage lenders, it is possible to restore the property value to close to the original value.’

He added: ‘Herbicide treatment of knotweed has always been very popular due to the lower costs, but the message is getting through that it’s only a control method and won’t solve the problem definitively.

‘Buyers are much more wary of buying a property which still has knotweed rhizome beneath the ground as there’s no way of knowing whether it’s completely dead. There’s also an environmental cost to using chemicals, which is of growing concern.’

Environet explained that the excavation element can be carried out during the winter months, allowing for full use of gardens during the summer.

What mortgage lenders say about knotweed 

Mortgage broker SPF Private Clients, explained that those buying a property where Japanese knotweed is found may find it less of a deal breaker than in the past where the lender may have automatically declined a mortgage application.

SPF Private Clients’ Mark Harris, said: ‘Should Japanese knotweed be identified, there are four categorisations assessing its severity, with 1 being best-case scenario and 4 being worst-case. 

‘Depending on which silo the property falls into, and whether there is specialist eradication work either ongoing or planned, and insurance in place, lenders may be willing to consider the application.

‘Depending on the severity of the problem, lenders may tailor the amount they are prepared to lend, or not lend at all.’ 

While securing a mortgage on a property with knotweed can remain challenging, lenders confirmed that they are open to providing finance if a management plan is in place. 

A Nationwide Building Society spokesman said: ‘Our policy on Japanese Knotweed depends on how far the plant is from the property. If it is less than seven metres away from the property, we would request a specialist report about eradicating it before deciding whether we could lend. 

‘If the plant is more than seven metres away, we would need written confirmation from the borrower that they want to proceed with their mortgage application despite the presence of the plant. 

‘What may be required is assessed on a case by case basis. Where the valuer identifies the presence of Japanese Knotweed, they may advise that a specialist report is required with respect to eradicating the plant and, where applicable, to report on repairing the property. Any report for eradication of the plant should include an insurance-backed 5 year warranty against re-infestation.’ 

And spokesperson for Halifax explained: ‘The presence of Japanese Knotweed itself is not a barrier to lending. 

‘We will be guided by the surveyor’s, and any subsequent expert’s, report on the scale, location and effects of any presence on or around the property.’  

How were the figures calculated? 

Official figures from the ONS show there at 27.8million households in Britain.

Environet disregarded 20 per cent of households that are flats as these are less likely to be affected by knotweed. 

That produces a figure of 22,420,000 homes in Britain. 

Environet’s survey conducted with YouGov in 2021 revealed that around 4 per cent of homes are affected by knotweed, either directly – meaning that it grows on the property – or indirectly where a neighbouring property is affected. 

It means 889,600 homes are affected in total, according to Environet.

The average value of a property in Britain is £264,244, according to Land Registry’s figures for August. 

Environet claimed that Japanese knotweed reduces the value of a property by 5 per cent on average. This is based on its own anecdotal evidence of what a property is worth once a knotweed management plan is in place (ie the 5 per cent reflects the amount that a buyer might try to reduce an asking price by due to the stigma and risk of the knotweed returning after treatment or removal). 

The 5 per cent reduction translates into £13,212 being knocked off the average home.

As such, the total amount knocked off property values in Britain as a result of Japanese knotweed is therefore 889,600 households multiplied by £13,212, which is £11,753,395,200.

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Ikea offers personalised design service in Ireland

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Ikea is piloting a home design service in Ireland. The Swedish furniture giant opened the new service in Naas on Monday.

Customers will be able to consult the retailer’s in-house home interiors specialists at the new store. The company said the service would be free, personalised and one-to-one.

It said people would be able to talk through ideas for upgrading their kitchen, living room or wardrobes with a designer. They will also be able to order any Ikea products from the store for delivery. Unlike Ikea’s other smaller store in Carrickmines, south Dublin, there will be no items available on site to bring home on the day.

The company said Ireland was one of eight markets worldwide in which it is piloting the new service.

“This new service allows us to bring our home furnishing expertise to the many, with bespoke design solutions that best reflect our customer’s unique style and design challenges,” said Martyn Allan, Ikea’s market manager in Ireland. “At the same time, we get the opportunity to listen to and learn from our customers to continue to develop our store formats.

“We are so proud that Ireland is part of this pilot, offering us the opportunity to move closer to our customers in towns and cities currently without IKEA stores,” he added.

People looking for a design consultation will need to book in advance online. When the company confirms the booking, it will let the customer know what to bring with them, such as measurements or photographs.

Over one or two consultations – which will not cost anything – the designer will draw up a 3D plan which will be accessible on the Ikea website to the customer up to five days after the consultation.

The store on Naas Main Street will feature some room sets and the company says the consultations will operate in strict compliance with current public health guidelines.

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Dubs get exercised over digital dollars

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Dubliners are to be “paid” for a walk in the park with “civic dollars” they can cash in for coffee and cake and other goods and services, in an effort to encourage outdoor exercise.

Visitors to five parks in the Dublin 8 area can earn the community currency if they sign up for a new smart phone app to allow Dublin City Council to track their park use.

The scheme is being piloted in the area from the Liberties to Inchicore, following research by the council’s Smart D8 team which found just 40 per cent of local residents took regular exercise, but 92 per cent said they would use a park for exercise if it was available to them.

Visitors to St Audoen’s Park, St Patrick’s Park, Weaver Park and Oscar Square in the Liberties, and Grattan Park in Inchicore who use the app will be rewarded with civic dollars for every 30 minutes they spend in the park up to a limit of 5 dollars a day.

Data anonymised

The system uses GPS data and allows users to opt in once they enter a park. Their data is anonymised, and a user’s session will end automatically once they walk out of the park. Data gathered will be used by the council to analyse park usage and allow for future planning and infrastructure improvements.

The dollars can be cashed in for discounts in a number of local businesses including Little Bird cafe, the Bike Hub, Mobility Genie, the Digital Hub and Epic Ireland. The dollars can also be donated to community organisations for more expensive services including marketing or IT advice and legal consultations, with participating companies including Core Tech IT, Paul Saxon Consulting, Éire Graphic Design and VAVA Influencers.

The Smart D8 project was established earlier this year to investigate innovative approaches to improve citizens’ health and wellbeing in Dublin 8, with the involvement of St James’s Hospital and the Digital Hub.

The civic dollars pilot will run for five months, with the aim of attracting 1,000 users in the first two months, and could be rolled out to other parks in the city if successful.

Organisations accepting dollar donations include Warrenmount Community Education Centre, Robert Emmet Community Development Project, Solas Project and Fatima Groups United.

The scheme had the potential to “improve the health and wellbeing of our citizens”, Lord Mayor of Dublin Alison Gilliland said.

“We need to encourage increased use of our parks, and the civic dollars project will do that while having the added benefit of contributing to local businesses and community organisations.”


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