25th July 2019
ARIA RESORTS ENTERS THE UK HOLIDAY PROPERTY INVESTMENT SECTOR
As the holiday property sector attracts a growing number of investors, Aria Resorts is rapidly emerging as a major player in this market, offering a range of UK holiday property investment options.
The holiday property lets market has seen very positive growth. This follows new Treasury rulings relating to tax relief on mortgages and Stamp Duty charges. With landlords taxed on their revenue, rather than after mortgage costs have been taken into account, the residential buy-to-let market has taken a tumble over the last decade.
A substantial drop in residential buy to let mortgages
According to the trade body UK Finance, back in 2007, there were 183,000 mortgages processed for landlords. By 2018, buy-to-let mortgages dropped to less than 70,000-per-year. The latest UK Finance figures show that the number of buy-to-let mortgages used for purchasing new properties fell by nearly 8 per cent in February, compared to the same month last year.
Holiday property investments proving highly appealing
Many investors who previously looked to the residential buy-to-let market are now turning their attention towards the holiday property sector for secure property investment. Aria Resorts offers three key products in this area. As well as providing quality holidays, the company sells holiday homes to those seeking a lifestyle asset and an asset-backed investment product for qualifying investors.
Iain Brown, chief executive of Aria Resorts, explains: “We provide high-quality, fully-equipped, home-from-home self-catering apartments, lodges and cottages in some of the most popular tourist destinations in the UK, including North Yorkshire, Devon, Cornwall and the Isle of Wight. There are excellent leisure facilities, entertainment and dining options for our guests. We can deliver romantic breaks or energetic family holidays with action-packed options for thrill-seeking holidaymakers. The holiday home range that we offer starts from £175,000, up to £500,000. As long as the owner has proof of a primary residence, they can use their Aria Resorts holiday property right through the year.”
Built to residential house building standards
Discerning investors are rightly focused on the quality of the buildings that they are buying. Aria Resorts understands this focus and ensures all of the investment options are underpinned with buildings that are built to residential standards.
“Our investment properties are built to NHBC standards. This means that people are able to get mortgages for the purchase and use the property as an income generator,” added Brown.
A ‘hands off’ investment option
Describing how this works, Brown says: “It’s very much a ‘hands off’ investment as we manage and source occupancy for the accommodation. The qualifying investor still buys the holiday home but then they immediately enter into a marketing agreement with us. We take care of things like insurance, cleaning and maintenance, together with the rentals.
“Investors receive a fixed return over three or five years. The interest is annually calculated and payable quarterly. At the end of the chosen term, the investor switches to a variable return but the ‘hands off’ service is still offered.”
Positive media coverage
The holiday home rental market has generated a lot of very positive media coverage of late and Brown believes there are a number of factors behind this positivity. “A property asset purchase has historically proven to be one of the less risky types of investments in the UK,” he says. “Property in the UK has generally performed well in capital appreciation terms, with only short-lived dips around recessions before a rebound effect occurs after a few years.”
The weak pound has influenced holidaying habits
The British public has certainly started to holiday more at home. There is clear evidence of this over the last ten years. The impact of Brexit and the pound devaluing has seen an increase in those choosing to holiday at home and make their money go further. Likewise, overseas investors can get to enjoy great value for their currency with positive exchange rates.
Tax benefits linked to UK holiday property investments
Brown was quick to point out that it’s not just the growing appeal of British holidays that is driving interest in holiday property investments. The taxation rules here in the UK are also favourable.
“Under certain reasonable criteria, HMRC are currently offering favourable tax circumstances for those who choose to invest in the furnished holiday property lets.
If you take these factors into account and you’ve got good mortgage repayments and the ability to deduct things like furniture and fixtures and fittings as expenses, then you’ve got an asset class in the furnished holiday property let sector that really does stand up well to financial scrutiny. I expect certainly over the next five years that there will be significant growth in this sector.”
Investor suitability considerations
Anyone interested in the UK holiday property investment product offered by Aria Resorts will be subject to a suitability check to comply with UK financial conduct regulations. Those who qualify will be given full details of how the investment works by the company’s specialised team. If the investor requires financial advice, they will be put in touch with a qualified Independent Financial Advisor.
Brown says: “We’re delighted to receive such enquiries and we will help people through the process. We want to give them as much information as possible so they can make an informed decision as to how beneficial it can be.”
After acquiring 14 sites in the last couple of years and with plans to add more holiday resorts to their portfolio, the Aria Resorts brand is becoming more visible in the mainstream media as a provider of secure property investment.
Outlining the company’s key aims in this area, Brown added: “We want to gain a reputation as a trusted supplier of quality holidays through our usual rental routes and also through other creative and consumer-friendly holiday products. We are also likely to become more visible among UK estate agents as a supplier of holiday homes. We believe that people switching from the residential buy-to-let to the furnished holiday home sector is going to be very beneficial.”
Brown also talked about the plans of Aria Resorts in the professional investment fraternity, explaining that they will become more active and visible in the financial media, positioned as a reliable provider of holiday property-related products.
“We are already working with carefully selected financial advisors, who will begin to share our product as a viable investment option for some of their clients. Aria Resorts is now on the map and is able to provide strong returns for qualifying investors”
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