Holiday Letting

ABN

Sort of semi retired and looking to move to the country/sea side. We are after a property on the south coast with in a nice rual(ish) location and nice views of rolling hillsides and or a dynamic coast line.
Problem is that the sort of property that we like are much more expensive than our mid terrace situated on the London/Surrey border. This means we will have to use between £100-£150K of our savings which will reduce the amount of interest that we were hoping to live off of.
So our thoughts moved towards getting a property that either has an annex or could easily have a part sectioned off that could be used for self-catering holiday letting in order to make up the shortfall.

Would we need to get planning permission to use part of a property as a holiday let?
If so is it likely to be able to get that permission before buying?
Would we have to pay business rates on the letting?

Has anyone done this and what are the likely pitfalls?

BobProperty

ABN wrote:

.....
Would we need to get planning permission to use part of a property as a holiday let?
If so is it likely to be able to get that permission before buying?
Would we have to pay business rates on the letting?

Has anyone done this and what are the likely pitfalls?

In answer to your questions:
Probably yes, it may depend on the LA approach to holiday lets, which, given that it presumably will be an area with lots of holiday lets already, they will have policies in place already.
Yes so long as you and the planning department get your act together and your vendor gives you the time to do so.
Can't remember, I think it depends on local policy but is likely to be council tax as it is still "residential"
I haven't done it but have looked into something like this in the past. Just realise that it is a business and treat it as such.

Madmel

Hi Bob

We have done something similar to you, but the house we bought has 2 cottages attached to it. Originally, one was the barn and the other the stable and cider press area; our house was a farmhouse. The cottages were converted in around 1985.

The previous owners to us ran both cottages as s/c holiday lets and the main house as a B&B. So when we moved in, it was all classed as business rates, except for the 3 rooms of the farmhouse that they occupied solely, which was band A Council Tax.

We have changed things; we don't do B&B, so the main house has been rebanded to F. One cottage is now a second home for my dad, who may well relocate to this part of the world this year. That has been reclassified as residential, and we pay Council Tax band C. The remaining cottage is still a holiday let. This is taxed as business rates, but because the area of it is quite small, we get 50% relief on the amount :j

I am fairly sure you do need planning permission to use this as holiday lets, because it is something our solicitor checked when she did the conveyancing.

The tourist board is really helpful about what to include in a s/c holiday let, so I would suggest contacting them for advice. We are still pretty new to this, but if you want any further help, don't hesitate to PM me.

Melanie

vitesse

First time post and it's a bit of a hi-jack :-)

Looking at doing something similar, buy a house with attached holiday cottages, also to run a small business (cattery).

Where is a good source for information on this, e.g. costs of advertising through the holliday cottage cimpanies, council/business tax etc.

Just to add to the general confusion also trying to set myself up with a small business, photography based. I guess going for the full lifestlye change.

From a financial perspective have about 20% to use as deposit, expected GROSS income, from cottages and cattery, covers mortgage (based on a residential 15 year mortgage). I've got a friendly Bank business manager to talk to , who else can I go to ask for finance.

Apologies if I've broken any forum etiquette.....

Mark

Madmel

My gut reaction is that in my so far limited experience, the reason that people come to my part of the world for holidays is for peace and quiet, beautiful scenery and a laid-back way of life. Personally, I wouldn't want to spend a week's holiday with a cattery anywhere nearby, as I imagine there would be noise plus staff and owners coming and going.

As far as advertising goes, your local Tourist Information Centre is a good place to begin. We have advertised in 2 local guides, we have our own website which is maintained externally (not very Money Saving but DH and I are just too busy to do it properly now) and in a respected Cottages brochure. All told, we have spent over £1000 on advertising since June last year; the brochures have just been published and we have 36 weeks still to fill...!

vitesse

Good point re cattery, would need to ensure they were seperate. Needs some thought as to how suitable the property is.

Was thinking that it's an added benifit for people who don't want to be parted from their cats, they can bring them along!

Do you pay a percentage for bookings that come through the brochure?

Madmel

Hi Mark

No, we pay for the advert, then any bookings are ours. At the moment, we don't do online booking through the brochure or that company's website. Many of our guests have been coming here for years and don't even have access to a computer! Our contact details are on the company website and in the brochure.

We are investigating whether it is worth offering online booking through our own website, but at the moment, we don't think our turnover or customer profile justifies it. Even if every week of the year was fully booked, we would only turnover about £15k, and as a quarter of that so far has come from previous guests, we are going to leave it for now.