Simon Smith: Anything possible in pandemic-fuelled staycation tsunami
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Simon Smith, director of John Smale & Company property consultants:
Boots? Waitrose? Lloyds Banking Group PLC? Which one of these disparate entities do you think would make a better landlord?
Our column this week touches on what has become a controversial aspect of the property world, that of rent and renting, tenants versus landlords, and the political hot potato that this field has become.
First of all, in terms of the all important transparency, I must declare a distinct lack of vested interests as my company does not participate in residential lettings.
However, in terms of experience I have been both a landlord and a tenant, so I have seen things from both sides of the fence.
The reason this issue has become so prominent is, like many things at present, a consequence of the pandemic although, like many other post pandemic problems, the root causes of the issue go back a lot further than that.
As anyone who regularly watches the news or reads the North Devon Gazette, there is what’s been described as a housing crisis in the West Country.
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In fact, here in North Devon, a group who campaign on this very issue had a recent meeting at the House of Commons with a prominent MP to look at how this issue can be tackled by Government on a national level - taking into account to areas such as the Lake District which are facing similar issues.
Among the reasons cited for this current malaise are the percentage of properties going into ownership as second homes and, much more discussed, is the suggestion that landlords are evicting residential tenants to offer the properties for holiday letting and cash in on the current staycation boom.
Taking the former statement first, North Devon has been a holiday destination since at least the Victorian times and the very qualities that draw holiday home owners to the area are the same qualities that give the region a tourism industry, and, assuming that one sees the economic benefits of a tourism industry as a good thing, then the two go hand in hand.
Of course, there may well be methods of managing the impact of holiday homes on the local housing market, whether that goes along the lines of the scheme proposed in parts of Cornwall and the Channel Islands to have a dual pricing structure whereby homes being sold as primary residences were available at one price, and were simultaneously available to buy as holiday homes at a higher price.
There is also the mechanism of local authority-imposed restrictions such as the Section 153 clauses used by the Exmoor National Park Authority which state that properties subject to the clause can only be sold to a buyer who has lived and/or worked in the parish for a specified number of years prior.
There is also the vexed question of whether commercial holiday lets should be subject to specific taxation and pay rates as businesses rather than at the domestic levy.
Consensus would have to be reached on any of these topics and, of course, everyone will have an opinion of their own – perhaps a referendum should be held, as these always solve a problem!
As to the latter statement, I have no specific knowledge of this happening, although that, of course, is not proof one way or the other.
My only thought was that, in my experience, the vast majority of properties bought by landlords as buy-to-let investments are not ideally suited to holiday let usage, being often located in the middle of town and in the most affordable locations.
Of course, in the pandemic-fuelled staycation tsunami anything is possible, but for example, a mid-terrace property on an estate in Barnstaple would make an excellent buy-to-let investment, but may not leap of the page as a holiday destination.
And as for our opening question of which PLC would make the best landlord... we’ll discuss that next week!