Vacation Rental Supply and Demand

From Country Holiday Lets

For quality and value holiday cottages
01568 612467 for more. info@countryholidaylets.co.uk. Useful for new cottage owners: http://www.countryholidaylets.co.uk/about-us/landlords-homeowners-info-pack


Country Holiday Lets is about to publish a sister website: www.holidayletsforsale.com  The archives of this blog have been moved to the new site, which should be live by about Saturday August 24th.  See the new blog at http://www.holidayletsforsale.com/blog/

Featured pictures are to show what a great place the area served by Country Holiday Lets is and that it will always be a good idea to visit us.

First: the market.

In July, we were excited in the first week when demand seemed to be returning to what it should be for taking bookings in that period.  Things then went quiet again.  August started off quite quiet and then picked up.  As of yesterday the index was about 100% compared to 2012.  However, we have been caught out before so we will wait until the end of this month before getting excited.  Even so, the signs are encouraging.


Second: something we are developing.

The second most visited page on the CHL web site is the advice to owners: http://www.countryholidaylets.co.uk/about-us/landlords-homeowners-info-pack  Demand for its contents is rising all the time. Perhaps this is because we are strong believers in sharing information instead of using the rule, if in doubt, keep secrets.  I think back to the time when we were starting out and publish whatever would have been useful to us in our early days.  It seems only sensible with the internet to offer help and advice in a generous way.  Keeping secrets, in many cases, is no longer a profitable or constructive activity.

South Shropshire between Craven Arms and Ludlow

CHL has over 8,600 good quality twitter followers and other useful assets. So we thought to set up a web site to serve the holiday letting sector in another way.  Development is almost complete and I hope to announce its arrival in the next post.  

It will be a radical and simple but highly informative service, potentially useful across many countries in and beyond the European area.  As the new web site will benefit from foundations developed and created by Country Holiday Lets, the same quality and dedication to service will apply.

I can't wait to tell you more.  Edit: The new site is now published at www.holidayletsforsale.com   More extensive advice is available at http://www.holidayletsforsale.com/advice-cottage-owners-info-pack/

Vacation rental holiday cottage let supply.

The UK government appears to have been doing a mini version of what happened in the US by guaranteeing deposits on house purchases.  This has caused the price of housing to rise across the country.  Whether this is a good thing is open to dispute; some fear a mini sub prime where others think it a good idea where the risk will be reduced to nothing by the benefits of economic activity.  But this financial stimulus has exaggerated a trend that has been growing over the last few years.

The supply of holiday lets is governed by several things and one of these is a chunk of the stock which owners can convert from holiday letting to what we call Assured Short Term Lets (AST). In normal language, this means residential letting.  As the price of housing rises so the demand from landlords for higher rents rises.  A significant part of the UK housing market is dominated by 'social housing' and publicly financed rental accommodation.

 South Herefordshire on the banks of the Wye

A rising house price pushes up AST rents so creating what looks like a rental spiral.  The more the government subsidises house purchase the more rents rise and the more the government.... etc etc.  The situation is not helped by a serious shortage of housing caused by population growth and a stalling building industry in the UK.

Holiday let supply reduces as AST becomes more attractive.  With a difficult economic environment, holiday let rents, particularly for the smaller lets, have frozen or are, even, falling.  This makes conversion, where planning permits it, even more attractive.

Many local authorities are unhappy to permit conversion to AST for buildings first developed for the holiday let market.  They want to avoid any attempts to sort circuit planning to be able to get residential developments throgh on the side.  Local authorities are very aware that the economy of an area will suffer if the stock of holiday homes reduces and is replaced with more social housing.  There are other factors but the present situation is fluid.

The effect of this is to take off the market many lower quality older holiday lets ('though not all by any means are poor quality) whilst keeping newer higher quality bespoke developments.  These include many farm and barn conversions and purpose built single lets or complexes.

In the Golden Valley

The situation is very fluid.  Planning laws are under review with the UK government playing with the idea of permitting conversion of urban commercial buildings into housing.  It is possible it may consider the same plan for holiday lets in general.  This could release a significant number of houses to the AST market and significantly reduce residential rents in country areas but the corresponding economic damage may outweigh the advantage despite being a very popular local move.

We shall have to wait for events to unfold.  There is still a strong interest in creating new holiday lets and the new ones now coming onto the market are almost universally well thought out and high quality.  This is the future.  It may end up that the move to AST will mainly rescue poor quality holiday lets and a few unfortunate good quality ones that the market has, simply, refused to pay a decent rate for.

These are turbulent times but the rule that quality and value are fundamental has not changed one bit.  Price is, of course, the big factor.  One of our owners with several top quality cottages offered some discounts recently and they had a radical effect on booking numbers.  It seems the choke point for bookings is not a smooth reduction as prices are raised but it could be seen more akin to a precipice cut off.

 The old Bishop of Hereford's house just North of Hereford

This would depend on area, quality, the season and several other factors.  The supply of high quality holiday lets remains healthy. Larger ones are not converting to AST in the same numbers as sleep 2 and sleep 4 lets.  This mirrors the reduction in occupancy for the lower sleep niches and the greater pressure on their rates caused by weaker demand.

The August booking index is encouraging, so far, but we have been caught out before.  Uncertainty has increased but, given time, general trends could point towards a higher quality of holiday cottages across the market coupled with a recovered demand.

These are interesting times.



For quality and value holiday cottages
01568 612467 for more. info@countryholidaylets.co.uk. Useful for new cottage owners: http://www.countryholidaylets.co.uk/about-us/landlords-homeowners-info-pack