Head of Leisure Department, Stephen Richards, is sharing his top tips if you are considering buying a Leisure property
Humberts Leisure have over two decades of experience in the leisure industry, specialising in the sale of holiday letting businesses, such as Guest Houses, B&Bs, Lodge Parks, Holiday Cottages and Glamping sites. Since 1997, Stephen Richards who heads up the division has been advising clients on acquisitions with the normal questions of: How much to spend; Where to buy; What is the length of season; and What is the future for the holiday letting market?
Here is Stephen's quick Buyers Guide for Leisure Properties -
What is the future for the holiday letting market?
The market has changed dramatically over the last 5 years due to the internet. Long gone are the former holiday letting brochures that you used to receive from holiday letting agents in the post. The introduction of new web based letting agents such as Air BnB and Booking.com have irreversibly transformed the market.
Demand for short breaks has increased twofold and the accessibility of properties on the market due to second home purchases and farmers that have diversified by developing redundant barns into holiday letting cottages has saturated the market in certain areas.
What should I consider when looking at a Leisure Business?
Buyers should consider the following points when considering a purchase of a leisure business:
1) Location to the coastline or tourist attractions.
2) Price relative to return.
3) Further development potential for the site.
4) The amount of land being purchased, is it too small for further development or too big, meaning that your purchasing land which is not required for the business.
5) The area that you’re purchasing in relation to the length of the holiday letting season which can range from 22 weeks to 40 weeks per year on average.
6) Planning history of the property – are there any refusals, current planning permissions or any that have lapsed.
Where should I consider buying a Leisure Business?
National Parks are always popular and the Peak District is one of the most visited National Parks in the country due to the conurbations surrounding it. The South West along with the Norfolk Broads are popular locations for holidays and would be worth considering.
Which are the most popular types of Leisure Businesses?
Holiday letting cottages are extremely popular as well as glamping businesses at this time.
Are there any tax implications?
When purchasing a holiday letting business, stamp duty (SDLT) needs to be considered as these are classed as mixed-use properties and have a lower SDLT threshold. The apportionments of value for Capital Gains needs to be thought through carefully on a purchase as this will set the precedence for any future sales of the business.
What should I watch out for when considering purchasing a Leisure Business?
Forensically looking through the accounting information and requesting further information regarding the history of the business along with future bookings is paramount to a successful purchase.
Humberts Leisure’s team are very happy to discuss clients requirements and act on behalf of corporates, trusts and charities in acquisitions across the country and have a range of leisure businesses currently for sale. Please contact our specialist Leisure Department if you have any queries about buying a holiday leisure business.