Will Leyland, 06 November 2020
This probably isn’t a question you’re likely to have asked yourself in the past, but in these unprecedented times it’s perhaps time to start thinking outside of the box.
With the coronavirus pandemic having changed many of the norms we’ve taken for granted for so long, so too has it changed the way people go on holiday and invest their money – at least in the short term but perhaps in the longer term too.
Property, perhaps counter to many people’s perception, is actually a very diverse sector and investment class, with many different types available. Of course, holiday homes are a sub-section of that but underneath that there are also things like static caravans and other weird and wonderful holiday home investment options.
Tipi’s, campsites and glamping have all soared in popularity since the summer when travel corridors and quarantine restrictions were placed all around Europe due to the pandemic. Suddenly the British weather wasn’t so much of a stumbling block to having a great time in the outdoors when the implications of a two-week quarantine were considered.
Property itself remains one of the most popular long-term investments in the UK, if not currently the most popular with the uncertainty the markets are facing with many businesses struggling with the implications of lockdown.
What that in mind, what are the other options?
As covered in an article for the Daily Mail, there are new caravan parks opening across the UK, with many finding it easier to be accepted for planning permission due to both the aesthetic and the fact that they’re much greener than property developments.
Many of these new sites are designed for premium customers, counter to the perception of run down Butlins or Haven sites of the past. Both of those companies have now spent millions renovating their sites and take pride in their upmarket new locations.
So, what could a caravan fetch you in yields? Well it’s hard to say as many don’t publish their rental records, however, the site mentioned in the article is selling unites from just under £115k. No small price but half that of the average UK property price. The site suggest that these caravans can be rented out for £2.5k per week in season (6 months of the year), which would give a rental income of £65k at maximum occupancy.
Of course, these are highly speculative and work on the assumption that they would always be occupied at the maximum asking price throughout the year, which is highly unlikely.
Of course, there’s the much more established route of buying your own home or Buy-To-Let.
At the moment, the UK property market is extremely robust and growing well. Rental yields, prices and capital gains are all growing, and with the volatility of the markets high during the pandemic, there is lots of money flowing in from all areas.
For buyers, there has probably never been a better time to take the plunge into property as the government have temporarily abolished stamp duty and mortgage companies are freeing up as much money as possible.
Whilst the idea of getting a static caravan may seem attractive, in truth it’s probably a bit of a flash in the pan, and of course the reality is that next summer it’s likely people will revert back to holidaying abroad, so it’s not really a solid long-term investment.
If anything, 2021 is likely to be the year of residential property as economies bounce back and demand grows even higher.
Will Leyland, 06 November 2020