Staying close to home this year? Imagine escaping to your own holiday home for some well-earned rest and relaxation. Too expensive you say? We look at why that may not be the case when it comes to a holiday home investment.
With the trend for staycations still going strong, a holiday home can be much more than a place to spend your leisure time – it’s also a savvy investment.
Holiday homes are experiencing a boom, and with our beautiful coastlines, the unique Broads National Park, as well as a rich history and heritage, Norfolk and Suffolk are hotspots for domestic breaks.
The figures speak for themselves: tourism spend in Suffolk jumped by £43m between 2015-16*, and Norfolk’s overall visitor economy has grown by 14pc since 2012, compared to England’s 8pc increase in that period**.
Benjamin Race, Group Sales and Marketing Manager, has seen holiday homes become among the best investments in term of property. If you didn't know, Tingdene Lifestyle has an expanding portfolio of holiday parks across the UK including four in Norfolk and Suffolk,
“We have a mix of holiday property owners; some buy the properties solely for their own use, some let them out just enough to cover the average running costs (£4-5,000 per year), while others see them purely as an investment,” says Benjamin.
In fact, many owners have multiple units in their investment plan – one customer has 10 - taking advantage of Tingdene’s guaranteed finance packages. An investor with £100,000 can invest in five properties for a £20,000 deposit each with monthly repayments over one-10 years (non-recourse finance). Benjamin says while it is not guaranteed and figures vary year on year and to individual circumstances, some owners have achieved a 14pc ROI (return on investment) if the properties are available year-round.
It’s this year-round offering that’s key to a successful holiday home investment, with that old favourite in property circles – location, location, location – playing a big part.
For the second consecutive year, Britons are taking more short breaks: 73pc are intending to take one this year, compared to 24pc looking at four-plus nights***. To capitalise on this customer base, a holiday house investment needs to be within a two-hour drive of a major city.
“We’re seeing more and more demand for micro-breaks,” says Benjamin. “It’s a real boom area, with people coming over on Friday night after work and school, then heading back on Sunday afternoon.
“Being close to popular tourist spots such as Southwold, which is just a 10-15 minute drive away from Broadlands Park & Marina, also keeps occupancy levels up.”
To help owners get the best return from their investments, Tingdene Lifestyle has a Managed Letting Scheme in partnership with Hoseasons, the UK’s largest provider of self-catering accommodation. Those who sign up can benefit from a steady flow of bookings from extensive marketing campaigns as well as management of the property.
Tingdene Lifestyle holiday homes at Tingdene Broadlands Park & Marina are also offered on a 125-year leasehold basis, which has multiple benefits. Many holiday parks sell holiday homes and lodges for up to as much as £150k - 250k on an annual licence, which means terms, such as annual costs, can be changed annually, whereas a leasehold offers more legal protection from The Landlord & Tenant Act on terms that are stipulated in the lease.
“The long lease term also means that re-sale is easier, making it more appealing for any potential buyers in the future. It’s also an investment that can easily be handed over to family members and grandchildren as an example for future use.” says Benjamin.
The increasing popularity of holiday let investments has led Benjamin and the team at Tingdene Lifestyle to come up with a new term to describe it – the paycation.
“Everyone’s familiar with the idea of the staycation – holiday at home and save on all the travelling, hassle and queues, and enjoy the sights and scenery of the UK at the same time.
“A paycation has all the same benefits: it’s a fantastic holiday option for you and your family and friends to enjoy, with the added benefit that when you’re not there it will earn you money.”