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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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Maurice Investments sell London office building for €30.3m (GB)

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Allsop, acting jointly alongside Anton Page, has completed the sale of the freehold of a Grade A workspace in Aldgate, central London, on behalf of Maurice Investments for €30.3m (£26m). Acquired by Meadow Partners, the price is equivalent to approximately €1120 (£960) per ft² and a net initial yield of 5%.

 

Wool + Tailor, 10-12 Alie Street E1, comprises 27,158ft² of Grade A office and ancillary accommodation over nine floors. It is within a three-minute walk of Aldgate station and a 15-minute walk of six further train and underground stations, including Whitechapel which is on the newly opened Elizabeth line, and is multi-let to five tenants. Maurice Investments had initially acquired the building in an off-market deal advised by Allsop, which also went on to conclude a successful leasing campaign alongside Anton Page.

 

Wool + Tailor was redeveloped in 2019 to include two additional floors and a new façade, with BREEAM “very good” and EPC A and B ratings. It features an eco-friendly biodiverse roof, cycle racks to accommodate up to 36 bikes, and a WiredScore Gold certification with fibre optic internet. Wool + Tailor further benefits from outstanding natural light throughout, which is enhanced by floor-to-ceiling heights of up to 3.3 metres, and a 7th floor communal business lounge with dual aspect terraces offering panoramic views of the City and beyond.

 

Matthew Millman, Partner at Allsop, said: “The sale of Wool + Tailor concludes a highly successful business plan for our client where we advised on the off-market acquisition, letting, then disposal of what has become one of the finest buildings in Aldgate. Wool + Tailor satisfies the requirements of the modern investor and occupier for ‘best in class’ office space with strong ESG credentials, excellent connectivity and plentiful nearby cafes, bars and restaurants.”

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AnaCap secures €59m loan for Paris office deal (FR)

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Tristan Capital Partners’ TIPS One “Income Plus” Real Estate Debt Fund has provided senior debt financing to funds advised by AnaCap Financial Partners, to support the €59.25m acquisition of South Station, a freehold office asset located in Massy, in the second ring of Paris. South Station is a high-quality property ideally located in Massy – the largest economic centre in the Southern Paris area – and is adjacent to the town’s main transport stations (RER and TGV). The asset is one of the most attractive buildings in the submarket offering modern A-grade office space with excellent amenities.

 

The sale and partial leaseback acquisition will see the vendor CGG, a geophysics specialist, remain as the majority tenant. Pramena Investment will act as the asset manager for the property.

 

Ashil Sodha, Director, Debt Investment at Tristan Capital Partners, said: “As TIPS One continues to diversify, we are pleased to have closed our first loan in France. We are focused on lending on high-quality assets with the right ESG characteristics and we believe this loan exemplifies this strategy well. We look forward to working alongside AnaCap and Pramena and supporting them in optimising their strategy for this asset.”

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Barratt and David Wilson invest €45.5m in UK resi market

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Harworth Group plc has sold two residential land parcel at its Waverley and Thoresby Vale developments to Barratt and David Wilson Homes, for a total consideration of €45.5m (£39m).

 

At Waverley in South Yorkshire, Harworth has competed a €33.8 (£29m) land sale which will see the delivery of approximately 450 homes, of which over 30% will be affordable. This represents Harworth’s largest-ever serviced residential land sale by number of plots. The new homes will represent Barratt and David Wilson Homes’ fifth phase at the site and will be situated adjacent to both Highwall Park and the Waverley Lake, benefitting from unique water frontage in an area of the development known as Waverley Waterfront. Construction will follow a bespoke design code, devised in partnership between Harworth and Barratt and David Wilson Homes, that complements the existing Waverley development while maximising the amenity value of the area’s waterfront location. The development will include a pedestrianised promenade, further enhancing the site’s placemaking and connectivity.

 

At Thoresby Vale in Nottinghamshire, Harworth has exchanged on the sale of serviced land capable of delivering 174 homes, for €11.6m (£10m). This represents the second phase of the Thoresby Vale development, following the sale of two land parcels at the site to Harron Homes and Barratt and David Wilson Homes in 2019 and 2020 respectively. Alongside the new homes, Barratt and David Wilson Homes will provide a new surface water attenuation pond and a multi-use path and associated landscaping, which will enhance connectivity and link to the site’s planned primary school and local centre, for which site preparation works are currently underway. The sales conclude an active first half for Harworth’s residential developments, during which over 100% of its budgeted residential land sales for the year were completed, exchanged or under offer, and it also launched its first single-family Build to Rent portfolio.

 

Andrew Blackshaw, Chief Operating Officer at Harworth, commented: “Barratt and David Wilson Homes is a trusted and valued partner to Harworth, and we are pleased to be developing our relationship with these two significant land sales. Harworth is particularly well-placed in volatile markets as our serviced land provides housebuilders with a product which is de-risked and ready to build on from day one. The acceleration of both our Waverley and Thoresby Vale sites will see Harworth stepping through its strategy to take advantage of the placemaking and levelling up that these schemes ultimately bring to these communities. In addition, these sales will enhance the maturation of these socially diverse neighbourhoods when delivered alongside our recently launched single family Build to Rent product, Project Spur.”

 

Ed Catchpole, Joint Regional Director for Yorkshire & Central at Harworth, added: “Barratt and David Wilson Homes has a proven track record of high-quality housing delivery at Harworth sites, and these transactions will help to further accelerate the build-out and placemaking at Waverley and Thoresby Vale. Both sites are also set to benefit from additional investment which will see the creation of new Build to Rent homes and local amenities.”

 

Mark Cotes, Managing Director at Barratt and David Wilson Homes North Midlands, said: “We’re thrilled to have secured the land for an extension to our Thoresby Vale development and will look forward to another opportunity to meet the growing demand for housing in Nottinghamshire. Our growing community in Edwinstowe will continue to provide new jobs for local people and we’ll be making further ecological and financial investments as the development progresses.”

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