Anything is possible in the pandemic-fueled staycation tsunami

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Posted:
12 a.m. on December 22, 2021



Simon Smith, Director of Real Estate Consultants at John Smale & Company:

Boots? Waitrose? Lloyds Banking Group PLC? Which of these disparate entities do you think would make a better owner?

Our column this week touches on what has become a controversial aspect of the real estate world, the land of rent and letting, tenants versus landlords, and the political hot potato that this area has become.

First of all, in terms of very important transparency, I must declare a flagrant lack of vested interests because my company does not participate in residential rentals.

However, in terms of experience, I have been both a landlord and a tenant so I saw things from both sides of the fence.

The reason this issue has become so important is, like many things now, a consequence of the pandemic although, like many other post-pandemic issues, the root causes of the issue date back much further than that.

Like anyone who regularly watches the news or reads the North Devon Gazette, there is what has been described as a housing crisis in the West Country.

In fact, here in North Devon, a group campaigning on this very issue had a recent meeting in the House of Commons with a prominent MP to consider how this issue can be tackled by government at the national level – taking into account has areas like the Lake District that face similar problems.

Among the reasons given for this current malaise is the percentage of properties that become owners as second homes and, much more discussed, is the suggestion that owners evict residential tenants to offer the properties for vacation rental and take advantage of the current boom in stays.

Taking the first statement first, North Devon has been a holiday destination since at least the Victorian era and the very qualities that attract holiday home owners to the area are the same qualities that give the area a tourism industry, and, assuming one sees the economic benefits of a tourism industry as a good thing, then the two go hand in hand.

Of course, there may well be methods of dealing with the impact of holiday homes on the local housing market, whether this goes along with the program offered in parts of Cornwall and the Channel Islands to have a dual structure. price where houses sold as primary residences were available at a price and were simultaneously available for purchase as vacation homes at a higher price.

There is also a mechanism of restrictions imposed by local authorities such as the section 153 clauses used by the Exmoor National Park Authority which state that properties subject to the clause can only be sold to a buyer. who has lived and / or worked in the parish for a specified number of years previously.

There is also the thorny question of whether commercial vacation rentals should be subject to specific corporate tax and remuneration rates rather than the national levy.

Consensus would have to be reached on each of these topics and, of course, everyone will have their own opinion – maybe a referendum should be held, because that always solves a problem!

As for this last claim, I have no specific knowledge of what is going on, although, of course, it is not proof one way or the other.

My only thought was that in my experience the vast majority of properties purchased by owners as rental investments are not ideal for vacation rentals, often being located in the middle of town and in the most desirable locations. more affordable.

Of course, in the pandemic fueled vacation tsunami anything is possible, but for example a mid-terrace property on an estate in Barnstaple would make a great rental investment, but can’t jump off the page as a destination. vacation.

And as for our opening question of which PLC would make the best owner … we’ll discuss that next week!


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