Norfolk Property Investment Report 2016 - Holiday Cottages

Norfolk Property
   Investment Report 2016

Norfolk Property
Investment Report 2016
This report is designed to offer helpful advice and information on Norfolk’s growing
holiday letting market, what to consider for optimum financial return, consistent
bookings and positive consumer feedback.

The UK holiday market

The concept of the UK ‘staycation’, coined as a phrase post-recession, is not showing
any signs of decline with many people still choosing to holiday in the UK.

Tourism is worth £126.9bn or 9% of total UK GDP (Tourism Alliance, UK Tourism
Statistics 2015).

Norfolk and the East of England is one region showing signs of increasing interest
from holidaymakers in the UK thanks to its huge open beaches, fantastic food and
fewer people.

In Norfolk, tourism spending leapt by more than 70% to
£100.82 million in 2014, from £58.87million in 2013 (VisitBritain).

A total of £966.64 million was spent on tourism in the East of
England last year, a rise of 8.99% (VisitBritain).

VisitEngland stated in its 2015 ‘Beyond Staycation’ Report that the England short
break market remains consistent. The appeal of a domestic break, whether for a
weekend away or as a main holiday, for UK residents remains strong. This presents
an opportunity for holiday let property investors at a time when interest rates
remain low and areas such as Norfolk have yet to catch up with property prices seen
in the South West.

                    holidaycottages.co.uk/let-your-cottage

The buy-to-let market is currently one of the fastest
growing areas of the mortgage market

The concept of second home ownership as an investment has been on the rise for
several years. Pension rules have changed to offer greater flexibility in how policies
can be used, for example, from age 55 many pension policy holders can access their
funds. This, coupled with attractive yield potential for holiday properties, means the
tourism market is increasingly recognised as a viable financial investment vehicle.

The new buy-to-let tax rules, which are being phased in from 2017, to be fully in
place by 2020, are likely to reduce the appeal of residential rental investments.
Therefore the holiday lettings market, which will be unaffected by the new laws,
looks set to dramatically increase its appeal.

About holidaycottages.co.uk

        Established in 1979, holidaycottages.co.uk is an award-
        winning family run business, specialising in letting self-
        catering holiday properties across the UK.

        Our portfolio is made up of over 2000 high quality holiday
        lets to suit varied budgets, group sizes and requirements.
        We cater also for individual needs such as dog-friendly
        and family-friendly, and our properties vary from coastal
        retreats to traditional farmhouses, and from modern barn
        conversions to large country houses.

        All properties are managed directly, each with its own
        Property Manager. We also have Regional Managers in each
        area of the UK, offering tailored advice and expertise for
        property owners.

        A clear set of values underpins the way we do business
        - pride, passion and integrity. Ensuring high standards
        and customer satisfaction are at the forefront of our
        business. A testament to this is our recent win at the British
        Travel Awards when we were named the Best Holiday
        Accommodation Provider for Customer Service.

holidaycottages.co.uk/let-your-cottage

Introduction to Norfolk
• Norfolk is one of the least crowded counties in Britain with only 401 people per
 square mile

• Nearly half its 859,400-strong population is concentrated in the city of Norwich and
 towns of Great Yarmouth, King’s Lynn and Thetford

• 94 miles of unspoilt coastline, lined by vast sandy beaches, encircles a rural county
 dominated by arable farming

Rising prices

Norfolk is seeing a surge in popularity and this is reflected in the booming property
market.

      Some forecasts suggest prices in the East of England are set to rise by
      more than 30% over the next five years

      Online searches for Norfolk holiday properties have grown by 12.8%
      year on year

Most of the county remains very affordable. The average house price in Thetford,
stands at just £162,881 or £194,368 in the seaside town of Cromer. Norfolk property
is around a third of the value of property in London with an average price of
£499,997, despite its proximity to the capital.

This mini boom is being driven by rising numbers of people turning to East Anglia
as they search for more affordable properties, away from London and the Home
Counties.

£164,398 – Average property price in Norfolk

£186,553 – Average property price across England and Wales

£539,018 – Average property price across London
(Land Registry House Price Index)

                 holidaycottages.co.uk/let-your-cottage

Investing in a holiday let
property
What financial return can you expect from a Norfolk
holiday property?
Well presented properties in a good location which sleep two people can earn their
owners £12,000 per year. High quality properties sleeping four can earn their owners
£16,000 per year and those sleeping eight can bring in up to £19,000.
(holidaycottages.co.uk)

£20k

£15k                                                Sleeps 8
                                Sleeps 4            £19k pa
                                £16k pa
£10k
               Sleeps 2
               £12k pa
 £5k

   £0

Some key measures of how well a property is performing
include:

      Yield
This is income generated from rental income against the total value of the property

      Occupancy
The number or days/weeks in a year which are booked by guests

      Repeat bookings
A good measure of the desirability of your property

      Seasonal/external factors
Key local events and of course the weather can play a key part in booking levels

      Online traffic
The interest a property gets online together with the number of bookings

      Enquiries
The number of email or telephone enquiries

      Guest feedback and reviews
The greatest measure of satisfaction is from people who have stayed in your
property

Be sure to review or check these measures of success before making your decision
to invest in a holiday property.

Where a property has not previously been a short-term let and past figures are not
available, try to get hold of comparable figures for similar properties nearby. An
experienced property management company such as holidaycottages.co.uk can help
provide such information to aid in any decisions.

                 holidaycottages.co.uk/let-your-cottage

Understanding your clients
and customers
What do customers look for?
If you are considering investing in a property to be used as a holiday home, it is
important to consider what potential customers may be looking for.

Assuming that the location you have chosen for your property was well researched
for its market potential and tourist appeal, there are three key customer needs that
you should consider:

Comfort
Personal taste and style may vary between customers in terms of their preferred
interior décor but a desire for high levels of comfort is universal.

Convenience
Convenience relates to the amenities offered by the property and its nearby location.
For example, being close to a beach or a family focused seaside resort will be good
for families. Older holidaymakers may consider being close to popular country
walking areas or historic sites more important.

Cost
Cost is always an important consideration. However, think about the value for
money that your property and its features offer your potential guests. As long as
customers feel what they are paying is reasonable for the product they will continue
to book.

Property style, features and selling points
• Keep decor colours and designs simple with neutral colours and clean
  contemporary designs

• Furniture and beds should look clean, comfortable and inviting

• Minimise clutter

• Cots, high chairs and useful equipment for a family holiday can make all the
  difference to your guests

• Any holiday rental is now expected to have a decent wireless internet connection –
  unless the property is being marketed as a special off-grid getaway spot

• Consider whether to market your home as pet friendly – this can significantly
  increase bookings

Example
The owners of Fern House in Cromer, run by holidaycottages.co.uk, installed a hot
tub in the garden in 2015 resulting in a 20.8% increase in booking value.
(holidaycottages.co.uk)

Top five highest performing features

  77%                 68%                64%                62%                 60%
Internet/wifi    Pub within 1 mile   Family properties    Dog friendly      Enclosed garden

[Percentage of bookings which included these features]

                 holidaycottages.co.uk/let-your-cottage

Predictions / trends in 2016
Prices on the up
House price rises across Norfolk show no signs of slowing in 2016. The minimal
interest rates of the last six years, and aftermath of the recession, have done little to
slow property price rises in the east of the country.

East Anglia as a whole is currently undergoing a property boom and the county of
Norfolk, for years considered a remote eastern outpost, is starting to be recognised
as a possible location from which people can commute to London.

Better road and rail networks connecting Norfolk to London are also boosting this
trend. Londoners looking for a quick getaway can reach Norfolk within a couple of
hours, compared with the lengthy five or so hours to reach popular spots in Cornwall.

Tourism boom

Tourism in Norfolk has been steadily increasing for the last ten years, despite a
major dip in 2013. Tourism spend in the county has risen from £54.95 million in 2005
to £100.82 million in 2014.

Overview of UK visitor statistics in 2014                     Change from the
                                                              previous year

Number of visits                     198,507
                                                              ˆ13.08%
Total spending                       £100.82 million
                                                              ˆ71.28%
Total nights spent                   1.45 million
                                                              ˆ17.13%
Average length of stay (nights)      7.32
                                                              ˆ3.52%
Average spend per visit              £508
                                                              ˆ51.49%
* www.visitbritain.org/nation-region-county-data

The effect of tourism may increase in the next 12 months as, despite price rises in
Norfolk, property values and rental prices remain lower in most parts of the county
than in other UK regions popular with tourists.

                 holidaycottages.co.uk/let-your-cottage

The average cost of a holiday in Norfolk is £515 compared with £713 in Cornwall.
Given that the average property price in Norfolk is £164,398 and in Cornwall it is
£193,445, the return on investment is much quicker on a holiday home in Norfolk.

Local estate agents say price rises are largely driven by people buying second homes
coupled with more confidence in the economy and believe it is likely to continue for
a few years.

A spokesman for Howards Estate Agents in Norwich said: “The market is recovering.
There’s a trend in people buying second homes.

There is more confidence in the economy and this is being
seen in the Norfolk property market. Prices are on the up.
The last three to four years have seen more people buying holiday let properties, in
certain areas more than others, like the quieter coastal places.”

Predicting continued growth in the buy-to-let market, he said: “It can only get better.
Places like Devon will become less popular as people start coming to Norfolk as it is
only a couple of hours from London. More and more people will realise that Norfolk
is a great alternative to the West Country.”

A spokesman for Allgood and Davey in Norwich said: “There has been an increase in
people investing in holiday properties in the last five years. In the initial aftermath of
the economic downturn there was no movement but now there is a steady market.”

Property prices in Norfolk’s beauty spots and northern coast will continue to rise as
a result of tourism. The limited number of properties and popularity of villages like
Blakeney and Burnham Market means demand outstrips supply, pushing up prices
even more.

While the biggest price rises will focus on fashionable coastal areas, the knock on
effect of these rises will gather momentum elsewhere. With better transport links
and a growing interest in this wonderfully rich and diverse county, investors should
look to the East.

holidaycottages.co.uk/let-your-cottage

For letting advice, contact:                                      For all press enquiries, contact:

www.holidaycottages.co.uk/let-your-cottage                        Tel: 0117 9251358
                                                                  Email: holidaycottages@purplefishpr.co.uk
Tel: 01237 426796
Email: newowners@holidaycottages.co.uk

               holidaycottages.co.uk is part of The Travel Chapter Ltd. 5 The Quay, Bideford EX39 2XX