Guest houses become prime property in Yorkshire hotspot
“PORRIDGE, prunes or cornflakes?” marked the start of every day spent on a childhood holiday at a guest house near Blackpool. Things have moved on a bit since Mrs Hornby’s breakfast offering.
Now, the offers on the table, rather more juicy than a bowl of prunes, are coming from people who want to buy the property and move into it as a family home.
The trend isn’t confined to the cities but it is particularly noticeable in places like York, where large family houses near the city centre are in short supply and strong demand. There’s also a plentiful supply of guest houses to fill the void.
The odds have been stacked against guest houses and bedand-breakfasts for years but it’s getting worse.
Ask anyone who runs such a business and they’ll tell you it’s incredibly hard work and not a lifestyle that suits everyone, especially if they have a family.
More recently, budget hotel chains have been offering rooms at half the price, to an increasingly consistent standard. They may lack character but they’re usually dependable and well geared up for the internet guest. What’s more, they’re multiplying like rabbits.
Not only is the whole game becoming much more competitive, it’s also become harder for an individual to find the funding for a purchase which may well exceed £800,000.
Time was when this came from the proceeds of a house sale or redundancy but those days have gone.
Put simply, it all comes down to price. Guest houses fell in value by around 20 per cent from their 2007 peak. House prices, too, fell back. But whereas the residential sector in central York has bounced back to surpass its previous peak, business premises have recovered more slowly and are still some 10 per cent down on seven years ago.
That makes for a big gap that in practice gives family houses a premium of 10-20 per cent over the business use for the same building. No wonder that when the time comes to hang up the No Vacancies sign, owners are keen to talk residential.
Almost without exception, the buyers are well-heeled families who have sold up in the country and are joining the stampede into the cities. They’re looking for large houses within walking distance of the city centre – just the sort of attributes found in a guest house. It’s perfect period accommodation and more often than not there’s even parking for the Porsche.
Streets such as St Marys, in the Bootham area of York have been transformed. Five years ago there were just four houses in family occupation. Now it’s twelve and counting. The scaffolding’s up, the skips are out and most of the remaining guest houses are for sale.
Planning permission will be required for the change of use and although that isn’t usually contentious, it’s always a good idea to have it in place before going to the market. Otherwise you may find yourself with an anxious few weeks waiting for an exchange of contracts while this is sorted out.
Once you’ve moved in, don’t forget to take down the guest house sign and do make sure the previous owner really did cancel that booking for the party of Japanese tourists over the Bank Holiday weekend.
Creating the ideal home isn’t always easy, especially if you don’t want eight en-suite bathrooms, but if you accept that as part of the deal, removing partition walls isn’t so time consuming or expensive.
At least you’re pretty much starting with a clean sheet and if the building has been starved of investment, the cost of major repairs will be reflected in the price.
Does it matter if we’re losing guest houses and gaining family homes? By and large this trend is good news. Houses are being returned to their original uses, owners are getting more money and buyers are happy to pay them a premium. Eat your heart out, Basil Fawlty.