Buying a UK Property as a holiday house, Short term rental options

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    Buying a UK Property as a holiday house, Short term rental options

    HI, I am a UK ex-pat living overseas and am considering buying an apartment in the UK when I retire for two purposes. One as a summer house to spend July, Aug, September in, and also to give my partner a UK base to make it easy for her if she decides that on my death she wishes to return to the UK. (We are both UK Nationals living overseas)

    I have a couple of ideas and I am wondering if people can help me pick holes in them, or flag up what I should consider.

    Option 1) Purchase a City Centre Apartment in Birmingham for approx 200,000 (Nice and central), maybe one in an old converted building (they look nice).
    Option 2) Purchase something more expensive in a holiday area such as the Cotswolds, maybe Stratford (if the American tourists come back)

    I would like to be able to rent it out, not a lot but at least enough to cover Council Tax, Ground Rent, Service Charge, and Insurance. Now I know Birmingham is probably not much of a holiday destination so not sure how it would go as a short-term rental.

    Would I be able to offer it as a 6 mths lease every year, undercutting the market if required? If I do this am I able to tell the tenants there will be no extension after the 6-month lease, or is there some kind of rental law that stops that?

    If I go option 2, it should be easier to rent it out for a few weeks, even though I am taking the bulk of the summer months, we could be flexible some times and visit May to June for example. But then you have the worry of finding reliable cleaners to turn the property around, I guess there are companies that may specialize in this in areas where there are a lot of holiday lets. Have any laws come in in any areas of the UK that make holiday lets illegal?

    I am thinking an apartment for security and freezing pipes in winter if the house is left unoccupied for large amounts of time.

    Just looking for advice and things to consider I may not have thought of.

    #2
    You cannot do a "6-month let" and be sure of getting the property back at the end.
    If tenant decides not to leave, then you have to take court action to get them out having given them appropriate notice. That will take several to many months if tenant is determined.
    This is because it is the tenant's home, and most people don't want somewhere for only 6 months (unless they are there temporarily for work).

    If you want reasonable guarantee of getting people out, then holiday lets is the only reasonable option.

    For holiday lets you need to meet certain requirements to get tax advantages (https://www.sykescottages.co.uk/blog...let-tax-guide/ has information). Using a holiday let specialist would probably be advisable given that you are abroad.

    Comment


      #3
      Originally posted by Kangaroos77 View Post
      Option 1) Purchase a City Centre Apartment in Birmingham for approx 200,000 (Nice and central), maybe one in an old converted building (they look nice).
      Option 2) Purchase something more expensive in a holiday area such as the Cotswolds, maybe Stratford (if the American tourists come back)

      I would like to be able to rent it out, not a lot but at least enough to cover Council Tax, Ground Rent, Service Charge, and Insurance. Now I know Birmingham is probably not much of a holiday destination so not sure how it would go as a short-term rental.
      Not as popular as Straford or the Cotswolds, but still very popular for short stays.

      Would I be able to offer it as a 6 mths lease every year, undercutting the market if required? If I do this am I able to tell the tenants there will be no extension after the 6-month lease, or is there some kind of rental law that stops that?
      You can offer the lease, but it can't be limited to six months.
      And yes there's a law to that effect.

      The market for people wanting to rent for 6 months over the winter is almost zero. You might find some student(s) or rich overseas students who'd rent from September to June though.

      If I go option 2, it should be easier to rent it out for a few weeks, even though I am taking the bulk of the summer months, we could be flexible some times and visit May to June for example. But then you have the worry of finding reliable cleaners to turn the property around, I guess there are companies that may specialize in this in areas where there are a lot of holiday lets. Have any laws come in in any areas of the UK that make holiday lets illegal?
      There are lots of specialist cleaning companies.
      There are no laws making holiday lets illegal, but cities are talking about it, because it closes out local residents.

      When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
      Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

      Comment


        #4
        Both options have drawbacks. Birmingham may not be a good tourist destination but other towns are, Chester, York, Edinburgh etc. so you don't have to be out in the sticks. Top priority should surely be to find a location that suits your holiday plans and your partner's requirements. If her family is in B'ham somewhere in the Cotswolds is unlikely to suit her. I believe some holiday letting agents will organise everything for you including cleaning, obviously for a price. As you say, an empty property in winter is a problem. Something in a university town might be a good compromise, students usually move out at the end of the summer term and most would be glad not to pay rent/retainer over the summer holidays.

        Comment


          #5
          Given what you say i would opt for the holiday let, also your partner may prefer to live somewhere nice when (and if) the worse happens to yourself, i certainly would pick living with great views and fresh air to a city centre box.

          Comment


            #6
            buying an apartment ( a flat )

            If you cannot do a 6 month rental, the only other avenue is AirB+B, or similar but the lease AND feeholder may prevent you.
            A lease normally says, not to part with possession / underlease for less that 12 months, and to be in the form of an A.S.T. (Asurred shorterm tenancy )
            You will also get complaints from the leaseholders and freeholder about different people arriving, unknown to them, and anoyance every week of hearing suitecases being dragged up and down the stairs, and parties at night.
            Also the extra scuffs to doors and walls with all this extra "Moving in and out" demands to be paid by you to rectify.
            Complaints about parking in the wrong spot, etc.

            And the big stopper is.If a flat is left vacant for more than 30 days ( and this varies up to 3 months ) The building insurance Co. has to be told, AND that reduces the insurance cover. AND a flat inspection is required every 2 weeks when unocupied, and reports kept. AND our insurance company states that the heating must be left on during winter OR the complete sysem is drained, including hot water tank.

            If not drained, because the heating is left on then weekly flushing of the wholewater system is require , ref legionella-landlords-responsibilities.

            https://www.hse.gov.uk/legionnaires/...sibilities.htm

            Main part is ..
            Additional actions for properties left vacant

            It is important that water is not allowed to stagnate within the water system and so there should be careful management of properties left vacant for extended periods (eg student accommodation left empty over the summer vacation). As a general principle, outlets on hot and cold water systems should be used at least once a week to maintain a degree of water flow and minimise the chances of stagnation. To manage the risks during non-occupancy, consideration should be given to implementing a suitable flushing regime or other measures such as draining the system if it is to remain vacant for long periods.

            You say "to make it easy for her if she decides that on my death she wishes to return to the UK"
            She may not wish to, so you have wasted your time. Just leave the £ 200,00 in the bank and buy a house when you retire.
            Problem solved !




            .

            Comment


              #7
              The student rental idea might be a good one. If there are posh students that would rent their own one-bed flat rather than sharing a house with others. Thinking back to my student days in the UK, we signed contracts from September (but uni didn't often start until right at the end) to June (but uni was virtually done by May). So maybe that could work as an idea in Birmingham, Oxford. Are their estate agents that deal with students in a professional manner?

              Thinking back again to my student days I think me and all over my friends dealt directly with landlords other than one who had an agent but he was a bit shady from memory.

              Comment


                #8
                Originally posted by ram View Post
                buying an apartment ( a flat )

                Main part is ..
                Additional actions for properties left vacant

                It is important that water is not allowed to stagnate within the water system and so there should be careful management of properties left vacant for extended periods (eg student accommodation left empty over the summer vacation). As a general principle, outlets on hot and cold water systems should be used at least once a week to maintain a degree of water flow and minimise the chances of stagnation. To manage the risks during non-occupancy, consideration should be given to implementing a suitable flushing regime or other measures such as draining the system if it is to remain vacant for long periods.
                Wow that is a complexity I had not thought of. Many of these apartments have electric heating I think, so could look for that to avoid central heating systems. Does flushing the system just mean turning off the water at the stop cock and emptying the taps?

                Yes we wont be buying until retirement, but during retirement, my wife would love us to spend the summers in the UK. The cost of short-term rentals has made me think buying something (if a small rental each year could cover the holding costs) might be a better financial decision as renting for 3 months looks expensive.

                Comment


                  #9
                  Originally posted by Kangaroos77 View Post
                  Wow that is a complexity I had not thought of. Many of these apartments have electric heating I think, so could look for that to avoid central heating systems. Does flushing the system just mean turning off the water at the stop cock and emptying the taps?.
                  I would NEVER entertain anywhere that had electric heating.

                  Having never drained a system, it would mean having no water in radiatiors ( maybe ) as those too can freeze and burst the connections.
                  Cheaper to have heating on ( suggest gas ), but yes, stopcock off and turn the taps on till nothing more comes out, and if got a hot water tank, hot taps turned on too.

                  I would suggest near the sea for a house, yes, a house,
                  I will send you a private memo much later today suggesting an area, where properties are half to three quarters your budget, as I never give my location out on here, as my clients don't know it's me on here. A house could be better, and no leasholders to annoy.


                  Comment


                    #10
                    A significant flaw in your plan is that you want to use the property in June, July and August and the only possible lettings are holiday lettings when the popular months will be June, July and August.

                    Apart from that, if you want a flat there are all the snags (understatement!) associated with leasehold properties. A small freehold property is probably a better option.

                    I think you have to decide exactly what it is you want and if it is within your budget. It more or less comes down to choosing between buying a property for a summer retreat and buying a property as an investment which provides an income; a combination of the two may be difficult to achieve.

                    Comment


                      #11
                      Originally posted by ram View Post
                      I would NEVER entertain anywhere that had electric heating.
                      I suspect you will not like the post ' no gas/gas boiler' world then.

                      Comment


                        #12
                        Me neither - multi fuel burner every time alongside propane out here in the sticks. We have never had mains gas!
                        Unshackled by the chains of idle vanity, A modest manatee, that's me

                        Comment


                          #13
                          I can see trouble ahead for every one of us with the climate targets being as they are, a clash of worlds and money is on its way.

                          Comment


                            #14
                            Originally posted by Hudson01 View Post

                            I suspect you will not like the post ' no gas/gas boiler' world then.
                            It is a post-"no natural gas" world.

                            There are proposals to replace it with hydrogen, but i'm not sure how the infrastructure would cope.

                            Comment


                              #15
                              I guess a reason I was thinking an apartment would be better, would be for the fact it would probably be safer to lock up and leave, no maintenance to do, less risk of broken into etc. Many years ago I lived in Birmingham City centre apartment, really enjoyed it and was the "safest" feeling property I have ever lived in. Only one way in a big thick door, cameras, security etc... Would feel confident leaving that for 6mths. No risk of frozen pipes, we only ran the heating 2 or 3 days a year as being up on the 8th floor it always seemed to stay warm.

                              How do you check if the apartment block has any rules about short term letting? I would be happy to limit the rental to 30 days, 60 days. Only really want to cover the holding costs.

                              If I wanted it purely as an investment it is easier to have in my home country, so its primarily a holiday place, but would just like it not to be a financial black hole that's costing money every year in Tax and service charge. We could do something like make every second july available to rent and come April, May, June some years.

                              Comment

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