HIDDY

Since entering our sixties last year we've began to discuss our future plans that bit more seriously recently. Although my heart is still in Scotland I would be happy to stay here as long as we or I alone could visit the UK on a more regular basis. So rather than having to find accommodation every time we wish to visit we were thinking it might make sense to have a place of our own. This would also mean I can store my bike, fishing/camping equipment,golf clubs etc instead of having to lug it all back and forth.

Just wondering if anyone can give any advice on the subject?

alanR

I'd rent some self storage instead.

1) Property in the UK is expensive
2) Property taxes in the UK are high
3) Insurance can be problematical - friends of mine with a "holiday home" cannot leave it empty for more than 90 days.

HIDDY

Good pointers which I've yet to research. ^

The money we save on accommodation costs would go towards paying the taxes and insurance. We've been looking at property prices for the areas we like in Scotland and found them to be very reasonable. We don't need anything grand as it's just the two of us. I have family who would make use of it as well so I doubt it would lie empty for long periods.

lhrsfo

I would disagree about the property taxes. According to an article about a year ago in the FT, the UK has one of the lower rates of property tax but one of the higher rates of property transaction tax. The former is considered to be one of the more significant causes of so many properties remaining empty.

As to responding to the OP, I live in the UK but have a holiday home in California for much the same reasons as the OP - keeping open old ties etc. The property taxes in California are about ten times those in London, on a property less than half as valuable, and they don't even include rubbish collection, fire service etc. So I've chosen to earn an income on the house through AirBnB and VRBO etc., which means I can afford to keep a manager who keeps the house looked after and in good condition. I use the very large owner's space for all my random possessions. Oddly, insurance is difficult because, apparently, the US insurance industry hasn't yet cottoned on to the AirBnB phenomenon, but we eventually found it.

I know many people in the UK who rent out converted barns etc. on their land as AirBnBs and I also know that there are quite a few AirBnB concierge services operating in the UK for absentee owners, so I should imagine that, if the capital is available, an adequate return on the investment could be made, whilst still deriving a huge amount of pleasure from it.

Jimmie76

What I'd recommend if you are looking at somewhere is seeing if you can find someone to manage it for you. Even if you're not looking to rent it out when you're not there it's very helpful. We've got a property management company who look after the house on ACK. They do all the maintenance and winterising the house (draining the pipes, moving furniture etc.) which is vital with New England winters. If you're looking at Scotland then I'd say it's probably a similar situation to that. Ask a family member to make sure that work is being carried out if you're not going to be there. Paying them the money to pay the management company means they'll only pay for and work that's been done.

HIDDY

Thanks lhrsfo. Wouldn't be too keen on renting it out to be honest as it kind of defeats the purpose of having it in the first place. How often do you use your place?

^
It's handy having family with time on their hands. I'm sure my sister and brother in law would gladly do some caretaking in turn for free use of the place.

lhrsfo

I use it probably three times a year for a week or two at a time. Otherwise it would be empty. Before I started doing holiday lets I used to worry incessantly about it: now I know it's ok as the manager is on top of the situation.

UKtravelbear

Compared to what?

UK Property Taxes - basically council tax - includes everything from police, fire, refuse collection, under 16 eduction, social services, libraries, planning for starters.

NickB

As others have said, property taxes (i.e. Council tax here) are not especially high. Besides, from your description, you are looking for something relatively small so something that should end up somewhere in the lower council tax bands.

Do your homework on insurance, though. I have never looked into buying a second home in the UK so have no direct experience of the issue in this country but we have recently acquired a second home in France and many contracts did not allow the property to be left unoccupied beyond a certain period (although we did find some reasonably price contracts that did without too much difficulty).
I suspect that the same will be true in the UK but it may require searching quite a bit (or asking a broker). It certainly is that case that, when I shop for insurance for my main residence in the UK, virtually all contracts I have looked at had vacancy clauses.

Bear in mind that there will be other expenses too beyond tax and insurance: you will have to conclude contract for utilities year-round even if you use the house for only a fraction of the time (although obviously consumption will be lower than a house occupied all year round). You need to factor in cost of maintenance as well.

As to renting, long-term renting is out but you could consider short-term holiday lets/airbnb-type rentals: that way, you would ensure that the property remains vacant when you want to use it but available for rent at other times. That said, some caveats here:
1) it is likely that the periods when you want to occupy the house will match the most desirable periods from a holiday rental perspective;
2) what suits your own needs may not necessarily be the same as what is most in demand on the holiday rental market;
3) You will need to pay someone to manage the property (or bribe relatives in some way );
4) renting will increase maintenance costs.

All these 4 things diminish the rental potential of the property. In any event, you would not want to be dependent on renting out and it would make sense to look for something that would work for you even on the assumption of not having any rental income whatsoever. I would treat it as something to keep at the back of the mind as a potential extra in the future rather than something to plan for right from the start.

rcspeirs

Many councils charge punitive rates of council tax on property that they classify as unoccupied. Can't give a "one size fits all" as rules vary from council to council. As an example, Argyll charges double rate if a property is occupied for less than 21 nights per year. You'll need to keep records to document your occupancy, and may be asked to back this up with utility bills showing usage.
Also be aware that council tax varies widely by area. We pay far more for our property in Argyll than we do for our property in London.
As others have pointed out, most "second home" insurance policies require the property to be regularly occupied - or for all services to be disconnected and drained.

HIDDY

Thanks for the info NickB. Yes renting out is far too much hassle even if it did pay the bills. My brother deals with a property management company in the UK which manages the renting out of our late mothers apartment so I have some experience of what's involved. After they get their cut and you spend money on health and safety related matters, maintenance etc there isn't a lot left. Anyway we do enough of that here so at our age we're looking to be free of it and relax more. We accept the costs involved keeping a home in the UK but there is always the chance we'll make a permanent move there in years to come so having a place to move straight into would be a bonus.

Good to know. Argyll is one area on our list.

GUWonder

There are ways to game utility use/expenses and even other things to make it seem like the space is occupied when it isn't. But it's probably not worth it.

For storage of items, don't you have friends or family with a bit of spare space in the countryside somewhere? Even having to pay for a small storage space at someone's place will be cheaper than owning a foreign home and dealing with the issues of being an absentee landlord for much of the year. [Ironic statement coming from me.]

I would think that for most people in this kind of situation short term would provide a better deal and greater flexibility than being a remote landlord. That is unless you think buying is going to come with substantial appreciation in the asset value of whatever it is you buy.

HIDDY

Appreciate your input GUWonder.

Yeah I've got a lovely sister who lives in Kilmarnock and has the space for storing things.....trouble is she's a bit of a Hyacinth Bucket. You need to give her six months warning before turning up at her door so she can have the house redecorated before your arrival.
I don't want to give the impression we're multi millionaires but despite being a Scot I wouldn't be going into this with a view to penny pinching. Although it makes sense to be fully aware of the costs involved the yearly outlay won't be much more than the cost you'd spend on a luxury holiday......not that we would do such a thing. As I said it's not a country estate we're after just a place large enough for the two of us to live in comfort. We don't want to keep any more ruddy cows!!

flatlander

If you do buy a property, and then engage a management company to maintain it and handle guest entry and cleanup, then you would not need to let it out very often to satisfy an insurance clause of 90 days unoccupied or similar. If your concern about letting it out is along the lines of "what if I want to use it then?", you can make it available for letting via one of the online travel agency sites only on occasions you know you will be elsewhere when you make the plans to be elsewhere, or only at shorter notice so you will also be unlikely to be there. I imagine you know, at any time, whether you will be in the UK within the next few weeks. If "no", then make the UK property available for another week or two. If "yes, might book a ticket" then don't make it available. For the better OTAs this can all be done online by yourself.

Accommodation in the more picturesque parts of Scotland is not in great supply, and demand particularly exceeds supply for shorter notice bookings, so I imagine you would find enough takers for "cottage in Scotland in 2 weeks time" to cover management fees and ensure enough occupancy to avoid the house having problems or the insurance being invalid - particularly if you set your price a little lower than others.

HIDDY

Thanks flatlander. ^

Truth be told we really don't fancy having strangers in it as we would like to keep some personal possessions there. Friends and family are welcome as long as they don't overstay their welcome.