Holiday let alternative
Buying property for holiday letting and occasional own use is an alternative to the more usual investment for full-time rental income, which has become popular with all age groups.
Buying property for holiday letting and occasional own use is an alternative to the more usual investment for full-time rental income, which has become popular with all age groups. While the financial returns may not be as good as year-round letting, there are tax incentives which help offset capital gains at resale, and such purchases can fund a home ultimately earmarked for retirement.
Norfolk is base to a successful homespun holiday lettings business, Norfolk Country Cottages, expanding from modest beginnings to become the leading independent booking agency for self-catering cottages in the county and neighbouring Suffolk.
Consultant adviser David Court tells me that each year, several hundred new owners apply to let their properties through the agency, which has strict quality guidelines for furnishings, equipment and location. Every property taken on must pass a stringent inspection.
The self-catering holiday, in its many forms, overtook the serviced holiday sector in popularity some years ago, and the country cottage segment has shown dramatic growth over the past two decades. But is it a lucrative investment?
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David Court says letting income after expenses would not normally exceed even the modest return on current stock market investments, but judged as a long-term undertaking the benefits are attractive.
"Capital cost of Norfolk property remains high,” he said. “But capital appreciation continues, so there is a clear argument that letting out a property for holidays, pending its use as a retirement home or occa-sional weekend retreat, is a positive way to maximise the investment."
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Located at Carlton House, Market Place, Reepham, the company offers around 350 privately-owned properties throughout Norfolk, plus 100 or so Suffolk homes through associated Southwold-based Suffolk Secrets.
Started in 1996 by Richard and Lesley Ellis in their front room, Norfolk Country Cottages (web address www. norfolkcottages.co.uk) employs 20 full and part-time staff.
Last year it attracted 45,000 people to Norfolk, contributing an estimated £7 million to the local economy, hopefully to be exceeded this year.