Assetz® News - UK HOLIDAY LETS WITH 10% YIELDS COMPETE WITH EUROPEAN MARKETS

UK HOLIDAY LETS WITH 10% YIELDS COMPETE WITH EUROPEAN MARKETS

27th February 2007 |

With rental yields of 10%, holiday homes on the Yorkshire coast are tempting property investors to keep their money on home shores, rather than chasing traditionally high yields in Europe and other overseas markets, says Assetz.

UK investors are currently benefiting from strong capital growth of about 10% per year as well as benefiting from low purchasing costs, small deposits and a straightforward legal system.

Holiday lets can earn as much in a week as the property could achieve in a month if let on a normal buy-to-let contract. This means that if the property is let well and is located in a good tourist area, it will produce a greater annual income than a buy to let property, despite having potentially much longer void periods.

Professionally run holiday homes in the UK also benefit from tax advantages. As long as they are available for let for 140 days per year, let for at least 70 of those and are fully furnished, they are classed as a commercial business asset. Therefore, they attract business asset ‘taper-relief’, which means an upper rate taxpayer pays capital gains of just 10% on the uplift in value after a two-year period rather than 40%. This compares to buy-to-let investors who benefit only from a capital gains tax reduction to 24% after a ten-year period.

Stuart Law, Managing Director of Assetz comments:

“Investors are searching for higher yields in order to continue profiting from their investments in light of rising interest rates, and UK holiday homes present a great opportunity.

“If the investor employs a holiday company to manage the property, they will benefit from a hands-off investment as they will not have to worry about cleaners and maintenance, and with gross yields of 10% they will still make a profit. What’s more, they can use the property during the void periods for their own holidays – a nice bonus.”

Assetz is offering investors the opportunity to take advantage of high-yield UK coastal holiday properties with the launch of an exclusive development of 10 homes in the North Yorkshire seaside town of Filey.

Filey is a very popular tourist hotspot, with one of the finest blue flag beaches in the UK and easy access to major towns such as Scarborough, Leeds, York and the North Yorkshire Moors. Overlooking Filey Bay, the development is surrounded by acres of fields, lakes and woodland, with the popular Primrose Valley resort close by and facilities including a swimming pool, leisure centre, convenience store, pub, hotel, restaurant, coffee shop and many more amenities.

The coastal apartments cost from just £125,000 with yields of 10% forecast. They are fully managed and service charge is paid for the investor in the first year. All homes apart from the two-bedroom, two-storey ‘Portsmouth’ apartment (available for £149,950) will be exempt from stamp duty. Assetz projects a net profit of over £4,000 in the first year, based on a moderate 28 weeks of occupancy. The apartments are due for completion in December 2007.

This is a press release by Assetz also available at http://press.assetz.co.uk/articles/3427.html. Alternatively, please see our full press release archive.