Lockdown told us a lot about how people think and value their life experiences.
For those who enjoy the urban living lifestyle and being 10 floors up overlooking the city skyline, being cocooned for 23 hours a day I’m sure felt like a jail sentence.
Along with the inability to fly — or with multiple restrictions, tests and risks if you could — saw the desire for ‘staycations’ or other options grow.
The demand for more rural living, second homes and investment holiday homes grew, which saw a spike in the house prices of coastal towns and areas of natural beauty.
Luckily, we have moved on from the covid and lockdown era, but unfortunately other aspects have snowballed — affecting elements including material costs, delays, sickness and poor government spending and planning.
Plus, with the new cost of living crisis and cost of finance, there will certainly be a squeeze.
With holidays abroad increasing in value linked with the prior, where does that leave us?
In the UK we are slightly spoilt for choice in terms of landscapes, beaches, historic buildings, walks and attractions.
Yes, it may rain for three weeks in August — but admittedly we are acclimatised to a bit of rain — and would probably moan if it was too hot anyway.
So how has the financial sector reacted?
There have been holiday let mortgages available for many years, but sometimes they have purely been adapted from a standard BTL, so are a bit clunky (though improvements are happening all the time).
One area that can fall between the cracks is the restricted holiday let market — this is where there is a restriction on the title deeds, meaning that the property cannot be lived in as a main residence or a long-term tenancy.
Many lenders, even though they have a holiday let product, are against lending to properties with one.
One of the main reasons is the sale risk, as they cannot be sold on as a standard residential/BTL property.
If we move into the development of several of these types of property, usually referred to as a ‘holiday park’, that can become even more difficult.
For example, an experienced client in the hospitality business acquired a part-built holiday park near the Yorkshire dales.
The site is set in an idyllic location with a selection of large four-bed properties, with views backing onto a lake.
The lending market for this type of development was minimal, so the clients had to use a bridge type structure — borrowing against value increase, to continue the build, which halted their progress and delayed future income from the finished units and site completion.
For the majority of funders, the factors of the restrictive natural environment, trading history linked and under construction meant it was a quick decline.
We presented a compelling combination of evidence and financials, then were able to obtain £2.1m of funding to refinance the current debt and provide capital to complete the next five holiday properties.
On completion, we can move on to the further phases — totalling 27 units.
While not a simple transaction in terms of background or structure, one of the attributes we hold as a debt advisory firm is to understand, present and deliver even the most complex of cases.
