Timeshare meets buy-to-let
The buy-to-let boom has mutated into a new strain – an investment scheme offering people the chance to make money by buying a hotel room and letting it out to guests. Currently being run by company GuestInvest, under the deal investors buy a hotel room for up to 52 nights a year and can earn an annual return of up to seven per cent by letting members of the public pay to stay in it.
GuestInvest estimates that an investor should see returns of between five and seven per cent a year on the room, depending on how often they use it themselves. Revenue from letting the room is shared equally between the hotel and the room owner, and investors have to pay £500 a year towards maintenance and room renovation costs.
The venture is aimed at the type of person who might otherwise have to choose between paying for expensive hotels on a regular basis or buying a city-based home that they wouldn’t use that often.
Ministers step up home loan scheme
The government is to expand its scheme for housing aid for key public sector workers in the south-east. Deputy prime minister John Prescott and health secretary John Reid will extend the £230 million starter homes initiative fund launched three years ago. Loans from the scheme help key public sector workers get on to the housing ladder but will no longer be limited to first-time buyers. The loans only have to be repaid if the workers leave their job or sell their house.
The four schemes on offer are:
· Homebuy, providing an equity loan of at least 25 per cent of the property value up to a limit of £50,000
· London Challenge Key Teacher Homebuy, providing a higher loan value limit for which only a small targeted group of teachers will be eligible
· Intermediate renting, offering a rent somewhere between social and open market rates
· Shared ownership on new-build schemes, where the purchaser buys at least 25 per cent of the equity and pays rent on the balance
The recent Barker review on housing supply, published alongside the budget, confirmed that the number of newly-built social houses for rent has fallen from 42,700 in 1994–95 to about 21,000 in 2002–03. The current scheme gives priority assistance for teachers, police, nurses and other essential health workers, but these groups are likely to be extended.