Spring Second Home Report
In the 20th Century owning a second holiday home was the preserve of the wealthy. They would use their holiday home for about 4 weeks a year and keep it empty for the rest of the time. This changed dramatically when mortgage finance became more accessible and people started to take more holidays at home, the staycationers. Now-a-days 95% of buyers look for a second home that not only provides holiday accommodation for themselves and their families but also an income from holiday letting.
The income from the holiday letting of self catering homes has grown significantly over the years and in some areas a second home can be rented out for as much as 40 weeks a year creating net returns for their owners of 10% or more. This naturally is very attractive in the current market and as an extra bonus the owner can use the property for their own use when it is not booked.
Letting, changeover costs and management.
If you are thinking of buying a second home as holiday let, the letting and cleaning of your property can be time consuming and although some people do the letting themselves through websites such as www.ownersdirect.com only a few of our clients take on the changeover process which involves the thorough cleaning, changing of sheets and inventory, every week in peak season. Most of our buyers leave the whole process to professionals who employ a team of local people.
The total cost for letting and changeovers can be as much as 25% of your letting income. This kind of cost may not be attractive for the pure investor so a second home may suit a person more who will use the property themselves as well as let it out.
A few of our more forward thinking clients recognise that second home ownership requires time consuming management. As a result, they have established ‘management run developments’, for example Stonerush Lakes, where they have an onsite management team that deals with changeovers and all other aspects that holiday makers may have during their stay. This gives comfort to the owners as they do not have to deal with the day to day running of their property. This becomes more relevant as the majority of the buyers live more than 2 hours drive from their holiday homes.
Lodges as a Second home.
This is a growing market even though some people may be adverse to these types of properties preferring the more expensive bricks and mortar option. We have seen them outperforming the market over the past 5 years both in rental and price terms. You must choose wisely however. Make sure that the lodges can be used all the year round; that they are given a long licence of 100 years or more; and are not built too close together.
The most important criterion is that the lodges are built to last and are of a good quality made with hardwood, have natural features like breathable sheep wool insulation and stainless steel guttering, all to be found at the Charteroak lodges.
The developments that are only giving 25 year licences probably means that this is the expected lifespan of the lodge, not a good investment!!
The well built lodges that are on the market are better value than ‘bricks and mortar’ and their re-sale value is holding up. We recently sold a lodge at Indio Lake in Devon for the same price that the owner paid for it 3 years ago, which is not bad in a falling market, thus showing that they can outperform the more traditional holiday home.
Some developments go one further like Una St Ives, www.unastives.co.uk where they have created a one stop destination for the holiday makers. There is a leisure centrepiece that has a spa, gym, indoor pool, multi use all weather court as well as restaurant and concierge service.
Another development with its own private beach that is due to be launched shortly is Black Rock www.blackrockcornwall.co.uk that will offer a total management and leisure package.
This adds to the attraction for the letting side of the properties on these type of developments as well as extending the letting season.
With on site lettings, management, changeover, concierge facilities as well as furniture packs to choose from, the ownership of a second home has been made easier, more lucrative, as well as stress free.
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