Many farm owners are considering new ways to generate income from their land and with the UK holiday market booming, now could be the time to think about converting that old barn into a holiday let.
What is farm diversification?
Farm diversification is the creation of further business ventures on top of your existing traditional farming activity, in order to bring in additional income.
This can be achieved in many different ways, including anything from broadening the range of wares you produce or diversifying the types of livestock you keep to setting up a unique local attraction or exploring tourism opportunities onsite.
What are the benefits of farm diversification for holiday letting?
With now being the perfect time to invest in a holiday let, farm diversification is becoming increasingly popular. A great deal of farms have old buildings, such as barns and cowsheds, that are unused and unsightly, or even just spare land that people want to make use of. Optimising these by turning them into holiday rental properties breathes a new, profitable use into these existing assets.
The major plus point of creating holiday lets via farm diversification is the income that it can generate. Sykes can be there to advise you every step of the way, even before your properties have been built, which will help you decide whether this is the right avenue for you.
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Being the owner of a farm diversification holiday let can potentially make you eligible for a number of beneficial tax breaks.
Your holiday let qualifying as a Furnished Holiday Let (FHL) applies special tax rules that can work in your favour. If you do qualify, you may be able to claim capital gains tax relief and small business rate relief, you’ll be able to make tax-advantaged pension contributions, and you could also benefit from capital allowances.
Not only may you be entitled to tax benefits, but you can also applying for farming investment funding. This will help provide any equipment and tools that you may need to get started.
Things to consider before diversifying your farm for holiday lets
Are you able to run a holiday let business alongside your agricultural commitments?
As you are probably aware, holiday letting can take a lot of time and effort. Have you sat down to consider how much ongoing work there will be with running a holiday let and whether this is practical with the requirements that your farm already has?
If it is beginning to seem like more work than you can keep up with, this is where holiday letting agents come in. Agencies such as ourselves can take a lot of this weight off your shoulders with our Fully Managed Service, taking care of changeovers, maintenance, cleaning without you having to lift a finger.
Is it worth the investment?
Before rushing into anything, take time to consider how much it will cost to diversify your farm compared to how much income a holiday let would likely bring in. This will help you decide whether farm diversification is worth it or not.
There are various costs that must be taken into account ahead of farm diversification, from planning permission to different building costs, however creating a successful holiday let can make it all worth it.
Speak to the experts
Speaking to professionals within the various relevant fields will give you a better idea of whether or not holiday letting is the avenue for you, and what you will need to do if you do decide to diversify your farm for holiday letting.
Talking with insurers will make you aware of potential risks and the type of cover required, while a conversation with letting agents such as ourselves will help you decide if holiday letting is the right business venture for you by discussing potential income projections and what options you have going forward.
What is the best type of farm diversified holiday let?
Holidaymakers are forever looking for something different. Offering guests a unique and inviting property to stay in among a wonderfully rural environment like a farm can drive enormous bookings, regardless of where you’re based.
Converting existing barns, stables and cowsheds means that you’ve already got a sturdy and attractive structure to work with, requiring much less building work as you’re not starting from scratch. The traditional and rustic style of these properties proves popular with guests, as they offer a cosy getaway in a rural setting. Combining original brickwork and wooden beams with modern hints is a look that many successful holiday lets opt for.
Log cabins and lodges are another great way to create a rustic escape without breaking the bank. As they are often made of wood, they aren’t too expensive or difficult to build, and offer the real connection with nature that many holidaymakers look for.
The glamping trend has soared in recent years, and quirky properties such as yurts and shepherd’s huts are as popular as ever. As they are fairly simple and cheap to build, you can spare some of your budget to add some high-quality touches such as a hot tub, top-of-the-range cooker or a luxury woodburner.
Do I need planning permission when farm diversifying for a holiday let?
If you are planning to diversify your farm for holiday letting by introducing a yurt, shepherd’s hut, lodge or log cabin, you will need planning permission in order to proceed.
Even if you are converting or altering an already existing building, planning permission is still required, and you may also need to apply for a ‘change of use’.
Top Barn: Holiday Let Farm Diversification Success
Top Barn is the perfect example of how to convert an unused farm building to great effect. Owner Mrs McGann decided to make use of the empty cowshed sitting on her family’s dairy farm – some five years later, this now luxurious barn conversion opened its doors for holiday letting.
“The positive impact on my life is the flexibility I have with my young family. I also get to work in a lovely barn surrounded by open countryside.”
It was far from an overnight project, as although the basic building structure was there, every little detail from fitting the drains and electrics to underpinning the walls and creating the driveway needing to be thought about, before being able to look at the interior design.
Mrs McGann was sure not to leave Top Barn’s roots behind, keeping many of the building’s original features to add a real touch of charm to this luxury 5-tick holiday home. Looking at the luxurious interior boasting every feature you could possibly need, it is safe to say that the time, effort and money invested into renovating Top Barn was completely worth it.
With spacious rooms presented to the highest standard, meticulous attention-to-detail and a hot tub with a view across the rolling Yorkshire countryside, Top Barn has everything needed to succeed.
Sykes’ Added Value Suppliers
One of the benefits of becoming a Sykes owner is that you get access to discounted rates from a vast array of suppliers across the UK, saving you money on just about everything from shepherd’s huts and hot tubs to woodburners and welcome packs.
Get in touch with Sykes today to find out more.
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The information contained in this article was accurate at the time of writing, based on our research. Rules, criteria and regulations change all the time, so please contact our prospective new owner team if you’d like to hear how. Nothing in this article constitutes the giving of financial, tax or legal advice to you; please consult your own professional advisor (accountant, lawyer etc). in this regard. If we have referred within the article to a third-party provider of unregulated holiday let mortgages, this is due to the fact that such mortgages aren’t currently regulated by the FCA. As a helpful reminder, your home may be repossessed if you do not keep up repayments on a mortgage, so again anything you decide to do in this particular area this is one on which you should take your own professional advice on too, as we aren’t providing and can’t provide you with this.
Charlotte Beautement, Holiday Let Content Writer
