U.K. holiday lets for cashflow/The renaissance of the great British seaside holiday ... ?

[Vanessa]

It's not all doom and gloom!

Pontins have announced a £50million development plan for its holiday centres that will create 2000 new jobs! They are intending to up-grade their centres to the standard of CentreParcs. This is another signal that the Great British seaside holiday is coming back into fashion.

You can read the full story from Pontins here.

[Vanessa]

This article from www.themovechannel. com explains how coastal areas are becoming more and more popular places to live. This is good news for the intrinsic stability of coastal property prices. Nick and I coined the phrase "coastal appreciation" and this supports that viewpoint, although we do not expect any real growth for several years.


'Oh I do like to be beside the seaside'
Friday, February 20, 2009

Jaimie Kanwar


A new report by Halifax has revealed that Coastal areas are proving to be the most popular destinations for internal migration across England and Wales...

According to the Bank, the attraction of living by the sea is proven by the fact that of the 20 local authorities (LAs) seeing the biggest increases in net internal migration between 1997 and 2007, 80 per cent are coastal areas.

This suggests that whilst city living still proves popular, many only stay for a limited number of years. Birmingham recorded both the highest internal inflow (315,600) of people and the highest outflow of people (403,600) between 1997 and 2007.

As city living wears thin, 19 of the 20 LAs that saw the largest net fall in internal migration are located within cities.

London losing its appeal?

Nine of the ten local authorities that experienced the biggest net drop in internal migration in England and Wales are in London. Overall, however, London's population increased over the period due to high levels of net international migration and 'natural change' (i.e. an excess of births over deaths).

Martin Ellis, Halifax economist, said: "There have been significant population movements across England and Wales during recent years. Coastal areas have proved to be popular destinations for people to move to as many people have sought to take advantage of the benefits of living near the sea.

"The figures also highlight the transient nature of the population in many of our major cities. Birmingham, for example, recorded both the highest level of internal immigration and emigration in England and Wales."

Source: www.Halifax.co.uk

[John Corey]

To the group and less so to Vanessa who already gets the following:

I think people need to retain a bit of perspective.

When the US suffered thru the Great Depression 50% of the homes were lost to foreclosure, unemployment hit 25% and other signs of pain were evident.

Put another way 50% of the people continued to own their homes, 75% of the population had a job and life went on.

There are a number of major developments still continuing in London (what I see looking out the window). Many have been stopped, slowed down or scaled back. I suspect more are continuing than are being stopped. There is a new development being announced soon that will add 3 towers to the area close to where the Shard of Glass is being built at London Bridge.

So, change is in the air and things are a bit bumpy. At the same time the economy continues. GDP might be down but we are talking about being at 98% of last year rather than 102.5% as we had expected.

Coming back to the topic...

Great British seaside holiday means what? So-so weather at a cheap price or something else?

John Corey

[Vanessa]

John,

Thank you for joining our forum - great to have you on here!

The great British seaside holiday means buckets and spades, cream teas, sandcastles, ice creams, walking for miles along windswept beaches, having a cup of tea while it rains, sitting on the beach watching the world go by, wearing a "Kiss Me Quick" hat, walking up the pier looking at the side shows, going on the Mouse roller coaster at Little Hampton screaming as it goes over the sea, it's sand in your sandwiches, it's crazy golf, it's getting sunburnt because you didn't realise how hot the sun was after all .... The British coastline is very beautiful and has been brought back into the mainstream interest by the BBC progamme "Coast" and "Coast" magazine and the regeneration of some of our favourite seaside towns.

Being an American, the above might be a bit alien to you ... but you should definitely try it some time!

[John Corey]

Vanessa,

My exposure to the UK coast was most rocky. I have not been on that many sand beaches in the UK.

US story. Where I grew up tides made a big difference. The same tides that impact the Severn or the Thames. We had shallow beaches so the horizontal difference between low tide and high tide could be a mile. Lots of hard sand to play on when the tide was out but very little beach left when the tide came in. You road the waves body surfing when the time was coming in as you could get longer rides.

I moved to California. I went to the beach for the first time and I asked when we would be going. I was expecting an answer based on the tide. When the answer did not seem to adjust for the tide I asked when high tide was. They said they did not know and why does it matter. Once I got there I realized how little the Pacific changes in terms of a high or low tide along the California coastline.

Thinking from one's own frame of reference can be very limiting when searching for a good investment. Assumptions about the facts when they are not in evidence.

John Corey
www.ChelseaPrivateEquity.com/blog
www.Twitter.com/John_Corey

Vanessa said:

John,

Being an American, the above might be a bit alien to you ... but you should definitely try it some time!

[Vanessa]

There are many beautiful sand beaches in the U.K., such as Camber Sands, Newquay, Weymouth etc. Obviously, tides can be an issue in certain places, but, generally, the most popular holiday beaches are very gently shelving, so the tide is not such a factor. The tide at Camber Sands goes out by about a mile but the main part of the beach is fine white sand anyway.

Some more things to add to my list: milkshakes and candy floss!

U.K. holiday lets are not for everyone, but I think they are a strategy worth considering to diversify your portfolio and spread risk, especially if, like me, you love the sea, and would like to use it yourself when you don't have any guests.

[Vanessa]

20 Ways to Make a Difference to Your Rental Guests
By CottageGuru | February 22, 2009


In these heady days of social networking, if someone experiences something negative they will shout it out to the world and in many cases, much of the world will hear. One video posted on You Tube, a photo on Facebook, or a 140 character review on Twitter could be quite damaging to your reputation. On the other hand, a rave review or a spectacular comment about an aspect of the rental can have a ton of visitors beating a path to your web site, many of whom want to have that experience themselves.

There are little things and there are big things that make the difference and you’ll never know what works best until you try. Here’s a few ideas – many of which have been gleaned from the amazing community at Lay My Hat, and if you are vacation rental owner and haven’t visited there yet, I suggest you sign up right now. They are presented in no particular order.

1 Buy the best mattresses you can afford
Don’t skimp on your guests’ sleeping experience. This is what they will remember long after the pictures of sunsets and kids playing in the water have become .jpg clutter.

2 Supply big fluffy towels
If you supply linens and towels, make sure you have some good sized bath towels. The Lay My Hat folks have talked about this one at length and the consensus is that big fluffy towels are important. For anyone who’s ever spend a night in a Holiday Inn or Best Western and tried to wrap one of their skimpy towels around an ample body you’ll know what I mean!

3 Send an inventory of what is in your kitchen.
How do they know what to bring if you don’t tell them what you’ve got? It’ll save on a bunch of emails asking you if you have a blender/garlic press/potato masher/whizzy pineapple corer etc.

4 Supply welcome packs for kids
Find out the kids ages and pack up colouring books and (non-wax) crayons; puzzles and children’s guide books. Get them involved in what is around the property, for example if you have waterfront and there are frogs – download and print a frog recognition guide. Make it cool for them to be there.

5 Be generous with the basics
Supply sufficient paper products (toilet paper, kitchen paper & coffee filters), liquid hand soap, cleaning materials, kitchen foil, dishwasher tabs, garbage bags, light bulbs, plastic containers for leftovers etc.

6 Provide stuff to do on a rainy day
Games (with all the pieces intact) , playing cards ( new packs); scrapbooking box; lots of paperbacks. Include a rainy-day ideas book with creative and fun things to do.

7 Guidebooks and maps
Go to town on the information you provide. Not just local tourist information but your own recommendations for restaurants, places to go and things to do. Include suggestions for half-day and full day driving tours or trips out. Remember that your guests probably don’t know the area and would be delighted with your ideas.

8 Emergency/Power out kit
Don’t leave guests in the dark in a power outage. Make sure they know what to do and where to find your power outage box, which should contain a wind-up radio, candles/gas lamp, lighter, information on who to contact to inform that the power is out, and a reminder about safety.

9 At least one really sharp kitchen knife
One of the top complaints about vacation rentals is the lack of sharp knives. Buy at least one really good knife or spend a little more on a good quality set.

10 Get a universal remote control
If you have more than one remote control for your TV, DVD, Video and stereo, invest in a universal that will control everything. Set it up for all your entertainment systems and leave one clear instruction guide should anything go wrong.

11 Provide a variety of herbs and spices
No-one wants to pack a whole bunch of seasonings, nor will they really want to go out and buy them all, so why not stock up with a comprehensive herb and spice collection. Keep them topped up too.

12 Fresh soap in the bathrooms
Either nicely packaged soaps or topped up soap dispensers will do, but please don’t leave used bars of soap in the washrooms.

13 Leave an ‘ooops I forgot’ pack
Pick up some travel sized items – toothpaste/shampoo/shower gel/razors etc. Put in a basket or box in a cupboard and let your guests know where it is should they have forgotten something.

14 Create the mood
Leave lights on for guests arriving at night; classical music playing on the radio for ambience and the heat up (or fire lit) for cooler times. Make sure the place smells lovely – using natural products where you can. Fresh flowers are a great touch too.

15 Write a welcome letter to your pet guests
There’s nothing pet owners like more than to have their furry friends acknowledged. Writing a letter directly to the pet and adding it to the welcome pack works really well if you want to get across your pet rules in a friendly way. Add a little pack of natural dog treats.

16 Supply a pet pack
Here’s what you need to pamper pets and their owners - Two stainless steel bowls, a bucket, several old towels, a dog brush, some rubber gloves, a ‘skunk kit’ (comprises bicarbonate of soda and hydrogen peroxide), a temporary dog tag with the cottage address and phone number, and a couple of tennis balls as well as a supply of plastic bags.

17 Be creative with kitchen stuff and small appliances
Provide a range of small appliances and bake ware so any spur of the moment cooking idea can be gratified. A bread maker; ice cream maker; Panini machine; juicer; slow cooker are just a few suggestions. Cake pans, muffin tins and cookie sheets are also welcomed. On your checkout list ask your guests what they would have liked that was not there. Then act on their suggestions if you can.

18 A welcome basket
Everyone loves to get something they were not expecting. A small basket with some seasonal items is nice to leave. We usually pick something up from our farmers market on a Saturday morning before our changeover. A fresh pot of basil, some local tomatoes and a small jar of honey in summer; some hot chocolate sachets, maple syrup and scented candles in winter. When you want to create a great first impression, this usually does it!

19 Offer a geocaching pack
Geocaching is fast becoming a really popular activity for all ages. For the price of a handheld GPS, a family can get outdoors and have a fun filled day without any entrance fees to pay. Provide a GPS pre-loaded with caches in a 20 mile radius of your property, and hide one of your own nearby to get them started off, and you’ll have them hooked. Geocachers will tell you they always recall how they got started, and the thrill of the first find. Be the one to initiate this and they’ll remember you forever. More on this on my Cottage Caching site.

And finally………

20 Keep in touch with your guests
Make a quick call or send an email after their stay to thank them for leaving the place so nice (even if it wasn’t quite up to your standards). Ask for some feedback and act on it, letting them know if you make a change as a result. Keep them informed if you make any additions – we let all our previous guests know when we added a hot tub, and got immediate reservations from some of them.

[Vanessa]

My personal additions to the above list:

* Supply a Visitor Book for guests to sign with their comments and feedback.

* Offer guests £25.00 M & S vouchers if they refer a friend who makes a booking.

* Supply a Welcome Folder with details of how to operate everything in the house, local emergency numbers, recommended restaurants, bars, cafes, days out, and shopping.

* Supply hotel quality bed-linen as it washes better and keeps in good condition longer.

* Supply nice toiletries. I like Molton Brown for that touch of luxury!

* Supply a picnic basket for days out.

* Supply beach towels (if near a beach), as these are bulky for guests to pack.

* Supply a beach tent (if near a beach) and beach games.

* Supply iPod docking station so that they can listen to their music during the holiday.

* Supply a hairdryer.

I am sure I'll think of some more ....

[Vanessa]

Cornwall rides the tide for investors: Overseas visitors are creating a boom in holiday homes

By Liz Rowlinson


Last updated at 11:52 PM on 12th March 2009



Swopping the Costas for Cornwall is going to be popular this summer. The strength of the euro and the dollar is persuading many of us to give up on a foreign holiday, while tourists from overseas are being tempted to Britain.


The price-comparison website, travelsupermarket.com, reports a 50 per cent increase in inquiries about UK self-catering holidays, and the property-finding agency, County Homesearch (0870 1123 3114, county-homesearch.co.uk), says that rentals for holiday cottages have jumped by 30 per cent this January, compared with 12 months ago.


Cornwall, with its long, sandy beaches and quaint harbours, showed some of the highest rises - for example, in Fowey, around the Helford River, and Padstow - with owners of 'chocolate-box' cottages achieving strong rental income.


So, with banks failing to offer investors much in the way of satisfactory returns, buying an income-generating holiday cottage might be a good alternative - and now is the time to do it, says County Homesearch's Reg Parry.


'A rare window has opened, where property prices and mortgage interest rates have fallen, and demand for UK holiday rentals has rocketed due to favourable exchange rates,' says Parry.


With property prices having fallen by an average of 17.7 per cent since last year, according to Halifax's latest figures, County Homesearch is not alone in reporting an increase in buyer inquiries.


One new development hoping to appeal to buyers is The Cornwall Hotel, Spa and Estate.


This project will feature 60 woodland homes built in 43 acres of parkland attached to a 19th-century estate in Tregorrick, two miles from Porthpean beach in St Austell Bay.

While the former family home will be turned into a 65-room luxury hotel and spa with a pool that opens up to the elements during the summer, the lodges will be sold freehold and managed by the hotel.


With holiday-home status (you can't live in them full-time), the Stay and Let scheme allows six weeks of personal use per year, with three per cent guaranteed returns (01726 874545, thecornwall.com).


The detached lodges are designed to be sympathetic to the Victorian parklands they inhabit - with cedar cladding and slate roofs which will mellow as they mature.


Prices start from £297,500 for a two-bed and £365,000 for a three-bed. 'We expect most buyers to have an association with Cornwall - many will be nostalgic about childhood holidays there,' says Sam Weller, The Cornwall's sales director.


'There's plenty to do, even if the weather is bad, with the Eden Project, the Tate St Ives and the Lost Gardens of Heligan.'

Nearby, also on the South West Coastal Path, is The Bay, another new-build development offering guaranteed rental returns.


This gated development will feature 42 two- and three-bedroom homes overlooking Talland Bay, from £299,950 through Knight Frank (01503 272 224, thebaytalland.com).

If surfing is your thing, guaranteed rental yields are also offered at Zinc, a 52-apartment development in Newquay.


Prices start at £275,000, also through Knight Frank (01392 848 844, knightfrank.com).


If you are buying a second home to let, there are a few things to bear in mind, says Charles Millward, of Rural Retreats (01386 701 177, rural retreats.co.uk), one of a number of holiday-cottage agencies reporting an increase in bookings in 2009.


To appeal to a growing number of couples seeking romantic minibreaks, you should be flexible.


'A lot of the younger generation who used to go, say to Paris or Brussels, are staying in this country instead,' he says. 'So we encourage owners to offer short breaks rather than a minimum of a week.'


A good ratio of bathrooms to bedrooms is a major selling point, as well as zip-link beds (which can flexibly convert from two single beds into a double).


'Plus, standards in decor have improved and granny's cast-off furniture won't wash any more,' says Millward. 'People expect a designer hotel feel - which is better than what they've got at home.'

[Richard Francis]

Vanessa & all,

BBC has done a lot in the the last years to promote Britain's home-grown treasures (eg: as mentioned Coast - but also a recent series on great drives around Britain - mainly to see if they are as pleasant as they were in the 1950's). No surprise - if you get good weather - they are still fantastic.

Nostalgia & a boost to national pride always does well during recessionary conditions - but it can be dangerous to place chips on the board until you look at the longer-term picture & collect as much data as possible. I remember at the start of the decade - an outbreak of 'foot and mouth' effectively wiped out tourism in UK for a period of over a year & the Government's attempts to get people 'back into Britain's countryside' was treated with a great deal of initial suspicion (especially given people considered the Government slow to react to containing the crisis in the first place).

Now - what is true to say - is that many coastal resorts are seeing re-investment - especially if they are in the catchment area of wealthy parts of the UK. This is good as it will make the job of identifying the 'strong' regions easier to identify and focus on.

I agree that overseas investors are in a much better position to purchase due to falling sterling and strong Euro - but again - a wise investor from overseas will do their homework first, given they are on unfamiliar turf. Still - that's a service opportunity for someone!

I like the idea of coastal appreciation (and have always liked the coast) long before the BBC reminded us all we are actually an island nation. If we return to a few more simple pleasures - rather than our seemingly perpetual addiction to retail grazing - I'm all for it. I think I just need to see a bit more science wrapped around it first.

Thanks for the tips (as ever) on rental differentiation - most we've tried and they DO work.

Richard

[Vanessa]

On a beautiful sunny Spring morning, it's the perfect time to start thinking of Summer holidays!

What comes to mind when you think of the British seaside holiday? Candy floss, crazy golf and ballroom dancing? Cream teas, milkshakes, and fish and chips? Sandcastles, buckets and spades, and paddling? Not to mention the miles of beautiful and unspoiled coast of this island nation - from sweeping sandy beaches to craggy cliffs. Wherever you are in England, you are never more than 73 miles from the sea! It's ingrained in our genetic make-up and culture!

However, the British seaside is a fairly recent invention. The classic chalet-and-pier towns grew up during the 19th century, when it finally occurred to someone that it might be nice to let workers in industrial towns go on holiday. Their late flowering was in the 1950s and 60s, before the advent of cheap travel abroad. In recent times, it's true to say that some of their grandeur has faded. But it could be that the current economic down-turn is just what is needed to breathe new life back into our coastal resorts.

In December 2007, we saw what was happening in the property market and wider economic climate, and we decided to diversify our portfolio to hedge and spread risk. We started researching a U.K. holiday let that had the potential to achieve year round occupancy. After much due diligence, and a weekend stay in the area, we purchased our first holiday let property "SeaBreeze" at Camber Sands, East Sussex in April 2008. With a buy-to-let property you have pure investment potential. However, imagine having the added benefits thrown into the equation of being able to buy your retirement home now, at today's prices, and have it funded by someone else as well as having your own holiday home at a very low personal cost and with generous tax advantages too (if your property is furnished). A high occupancy holiday let also produces significant net cash flow, makes perfect sense in the current economic climate, and enjoys many financial and other benefits that traditional buy-to-lets don't.



Here are our Top Ten reasons to invest in holiday lets this year:

1. Renaissance in the great British seaside holiday, led by magazines like "Coast" and TV programmes like "A Place By The Sea" and BBC's "Coast". There is a significant regeneration of traditional seaside towns going on around the U.K. The seaside resort of Blackpool is set to undergo a £220m transformation with new hotels, shops and restaurants planned. Meanwhile the "Sea Change" government-backed initiative led by CABE (the Commission for Architecture and the Built Environment) aims to regenerate seafront resorts across the country through a range of cultural, heritage and public space projects, with the aim of boosting local tourism and contributing to wider economic development. Dover and Torbay are two of the towns set to receive £4m grants. The fire-ravaged Grand Pier pavilion in Weston-super-Mare is set to be replaced with a futuristic £30 million development that will open in Summer 2010.

2. The credit crunch is forcing families to holiday at home. Research from the Confederation of Passenger Transport (CPT) has revealed that twice as many Britons are planning to spend their holidays in the UK this year compared with last as a result of the economic downturn. The price-comparison website, travelsupermarket.com, also reports a 50 per cent increase in inquiries about UK self-catering holidays, and the property-finding agency, County Homesearch says that rentals for holiday cottages have jumped by 30 per cent this January, compared with 12 months ago.

3. The strength of the Euro and U.S. dollar, plus increased costs of flights and airport taxes, makes a holiday abroad significantly more expensive. By the same token, it also makes a holiday in the U.K. a very attractive proposition for tourists!

4. A new report by Halifax has revealed that Coastal areas are proving to be the most popular destinations for internal migration across England and Wales. According to the Bank, the attraction of living by the sea is proven by the fact that of the 20 local authorities (LAs) seeing the biggest increases in net internal migration between 1997 and 2007, 80 per cent are coastal areas. This suggests that whilst city living still proves popular, many only stay for a limited number of years. Birmingham recorded both the highest internal inflow (315,600) of people and the highest outflow of people (403,600) between 1997 and 2007. The rise in people who are office nomads, self-employed, free-lancers, consultants, web workers, just knowledge workers in general, has led to changes in the ways people work. The nature of their work means they can work from wherever they want and coastal living has many lifestyle benefits. (N.B. We believe that properties that offer space are going to be a big commodity in the future, as many people will be working from home and will want a home office. This again is why houses are always preferable to flats).

5. Pontins recently announced a £50m regeneration programme for their holiday sites across the U.K. They will also be creating 2000 new jobs. With the credit crunch biting, it's compelling information to know that Pontins believe in investing in U.K. holidays. With investment comes growth, so up-graded Pontins sites will contribute to the local micro economy and bring increased traffic to the area.

6. Coastal properties benefit from "coastal appreciation". According to the Halifax, the average property price in 24 seaside towns was at least 20% higher than the county average last year, and these towns are expected to remain largely unaffected by the credit crunch. The Halifax study also found that over the longer term there were 18 coastal towns that saw increases in price of over 100% between 2002 and 2007. This is because buyers of seaside properties in the UK tend to be older and wealthier than others so do not need to borrow large amounts of money to fund the purchase. The net inward migration and increasing popularity of coastal towns will also support house price stability.

7. There are some attractive tax benefits to owning a U.K. holiday let.
With UK holiday lettings, you can realise a tax advantage if you make a loss on your earnings from the property, and when you sell the property:

If you make a loss

Any loss can be offset against your other income, not just the property income, reducing your overall tax bill. Or you can carry the loss forward and offset it against future letting profits.

When you sell the property

You may be able to take advantage of Capital Gains Tax (CGT) reliefs, such as 'business asset roll-over relief'. For example, if you reinvest within three years in another UK holiday letting property or certain other assets costing the same as or more than you got for the property you have sold, you may be able to defer payment of CGT until you dispose of those new assets.

You may also pay less CGT when you sell a property you have used for UK holiday letting, compared with other residential let property. This is because a UK holiday letting property is treated as a business asset for the purposes of 'taper relief', so the more favourable rates of 'business-asset taper relief' may apply to any capital gain you make on the sale.

The amount by which the gain is reduced by taper relief will depend on how long you have owned the property and how long you have used it for qualifying holiday letting.

To understand the rules fully, and find out about other reliefs you may qualify for, ask your professional adviser or Tax Office about CGT reliefs on the sale of UK holiday lettings property.



8. In a recent survey, 52% of holiday makers said that the number one priority for their choice of holiday was to be close to a beach. If you have a coastal holiday let, close to a beach, you can be assured of well above average occupancy in the coming years*. However, also check for problems of flooding and coastal erosion before purchasing a beach-side property.

9. There are lifestyle benefits to owning a holiday let. These can be considerable, as the feeling of knowing you have a home away from home to visit when you please is a very comforting emotion to have. If you enjoy your home comforts even when on holiday, owning a second home is a very positive lifestyle option and can increase your enjoyment of regular holidays when you take them. You can take a break when you like, and no need to plan! Not only that, but you can open your second home up to family and friends if they need it and for many it becomes a regular occasion to have large social gatherings there. Even having a holiday home as a weekend getaway can be fun as you can switch off completely from your working week and enjoy the relaxation of knowing you're having fun and making some money through rental cash-flow when the property is "working". Many people have cash in the bank that is not earning them any interest. A holiday let property purchase can give them a return on their money, an investment, and add a new dimension to their lifestyle!

10. The advent of social media makes marketing to a global market easier than ever before. We use Twitter, Facebook, ecademy, and related forums to create visibility and awareness of our property in the market place - and it works. High quality holiday lets benefit from repeat business and referrals, so you only need to get a couple of seasons under your belt, and then the marketing engine will start to run itself!

• We are pleased to report that our holiday let, SeaBreeze, is almost fully booked for the month of April which is considered a hard month to fill. We also have 6 weeks booked in the summer already!.
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• Please visit click here for an interesting discussion on holiday lets and how to get the most out of them.
• Please visit the tax man for the details of the tax benefits of owning a holiday let. click here
• 
  Nick
  
  
  
  

[Wasim]

Hi Guys

Great advice all round as usual!!!

Regards

Wasim

[Daniel Gladstone]

I'm a mortgage broker based in Cornwall, and from speaking to local businesses, this summer is looking really good. Bookings are up everywhere and some places are already fully booked for most of the sumer.

It seems Brits are planning their holidays in the UK and this can only be a good thing for the whole economy, with much less cash haemorrhaging away into foreign countries.

There is of course a downside to this, my local beach will be packed and I'll be sharing waves with 50 other surfers, and even 10 to a wave is way too many!

Dan Gladstone
Independent Mortgage broker