Developing Furnished Holiday Lets to ‘future proof’
5 Nov 2019
Brexit uncertainty has loomed large for several years and shows no sign of being defused any time soon. Calls to plan ahead have meant different strategies for different businesses but, without a firm Brexit proposition, or a definite end in sight, such planning has been remarkably difficult.
Jane Hill, a partner at Saffery Champness in Peterborough, and a member of the firm’s Landed Estates & Rural Business Group, says that looking to other opportunities away from conventional agri-business have been the focus for some estates and farming enterprises.
“With the pound/euro exchange rate fluctuating, plus concerns over travelling to Europe, and possible additional requirements to drive there, if there was a time to look at providing holiday lets, and particularly at the higher end of the market, this is it. And we know that heritage properties and quirkier buildings do have significant appeal.”
That has been a part of the plan at Easton Estate, a traditional rural estate on the Lincolnshire/Rutland border that has been in the Cholmeley family since the mid 16th century. Here, the estate’s walled gardens have been turned not just into a visitor attraction in their own right but also a destination with the development of a number of luxury holiday rentals.
Sir Fred Cholmeley explains the decision that prompted the diversification into holiday lets at Easton:
“The holiday let business was sparked by a conversation with my brother-in-law who owns a hotel. He had seen other high-end accommodation in out-of-the-way places, and it was the accommodation itself that was the main draw rather than the location. We had a number of redundant buildings around Easton Walled Gardens which looked like they would be ideal to upgrade and convert.”
“It’s been a financial success in terms of both letting income and the additional footfall for Easton Walled Gardens, for which it has opened up a whole new market. And there have been some unexpected consequences – the let properties have been good for the local economy by bringing people into the village, and adding custom for the local pub. And there has been a boost to staff morale too as a change from their normal work.”
And the main challenges? Sir Fred said:
“In some ways the project has been remarkably challenge free. The planning system has worked, but we have had to comply of course with all necessary building regulations for listed buildings and that has been a test at times. We have had to change orientation in that we are now firmly in the visitor and tourism business where ‘the customer is always right’ and that has been vital. What has helped us is that much of the infrastructure was already in place, we had a website, and a marketing team, and a maintenance crew. All told, it has been a very enjoyable process and, being all about property, has been very different from the conventional day job.”
Jane Hill said:
“Moving into the Furnished Holiday Letting business is becoming more popular with landed estates and agricultural enterprises across our client base and is helping them to spread business risk during uncertain times and future proof for what is still to come.
“Depending on how such developments are structured there can be tax advantages in terms of income and inheritance tax, by adding to the business revenue stream as trading income. With high-end lets there will be significant capital outlay that will need to be factored in and an increase in access to property, so a potential loss of owner privacy. Also, much of the success is dependent on meeting certain occupancy levels and undertaking diligent and effective marketing and promotion.
“But where there are redundant farm and estate buildings, as has been the case at Easton, then such a project is certainly worthy of consideration.”