Sunnier climes abroad: Stacey Meadwell talks to two property professionals whose holiday homes provide much-needed solacefrom the economic doom and gloom afflicting the industry
It is August, and thoughts turn to holidays. A chance to get away from it all, forget the stresses and strains of global economic gloom and swap the credit crunch for poolside cocktails. Well, for some people, at least.
With the pound growing weaker against the euro, and someholiday-home markets in meltdown, you have to choose carefully where to go to leave it all behind. Spain has dominated the press. Having enjoyed house price increases of up to 150% in the eight years to 2007, it is now seeing values drop 20-30%.
Brits own around 425,000 properties abroad, but it is not always just about investment.
The economic problems certainly do not seem to concern two property players who have both turned work into pleasure, and made money out of it.
John Hitchcox, Yoo
Talking to John Hitchcox, who heads trendy property design and development company Yoo, is a lesson in how the other half lives.
His £1.5m South African villa, overlooking the beach at Camps Bay in Cape Town, was what he describes as an “impulse purchase”. He had rented the six-bedroom property for a holiday, but as he was leaving, he decided to put in an offer.
“Every time I go on holiday, I end up looking at what is going on in the property market,” he says. “I looked at everything in Camps Bay, and it was the best we could find at the time. It’s far enough from the sea not to be noisy.”
But just in case you happen to have a million or two burning a hole in your bank account, Hitchcox offers a word of warning about being seduced by beautiful beaches in exotic locations. “When you put an offer in for a property in South Africa, that offer is binding,” he says. “That is something you have to learn pretty quickly. So beware of impulse purchasing.”
And the South African market is not immune to the housing malaise, either, having cooled off a little from recent highs. But Hitchcox – who dates underwear model Caprice – does not believe his villa has lost value since he bought it two years ago.
Hitchcox and his family use the villa for only three weeks a year. It is rented out for around half the year, and apparently produces a “good yield”.
Unsurprisingly for such a property, the short-term tenants are not just your average millionaires and their families. The villa has also become a favourite of the fashion industry for photo shoots.
Hitchcox, who set up the Manhattan Loft Company in 1992, admits he does not use the villa as much as he anticipated when he bought it and, despite renting it out, feels it is not used efficiently. With this in mind, he wants to set up a holiday club with like-minded individuals who own similar holiday homes world-wide.
The idea would be to put the properties in a portfolio that each member could then make use of.
The South African holiday home has also inspired a development project in the UK. Hitchcox is in the process of developing 160 homes – designed to be second homes – in 650 acres around a lake in the Cotswolds. Prices start at £700,000 and go up to £2.5m, so are not for those feeling the credit pinch. The development will include a sailing club, spa and hotel.
There will be four show homes, with the rest built to order and, naturally, Hitchcox will have one of the first properties to be completed. Having a house in the Cotswolds gets rid of the “hassle” of travelling because it is only a couple of hours’ drive from London, he says.
And despite the economic gloom, Hitchcox says sales are going well.
His next holiday home purchase will be on the Spanish island of Ibiza. It is an island that Hitchcox visits frequently, but purchasing a suitable villa there has so far eluded him.
“Every year, I’ve managed to get a house under offer in Ibiza, but the deal has fallen through,” he says.
Geoff Egan, Egan Lawson
Geoff Egan’s holiday homes may not have beach views, but when your entire family is skiing-mad, then that is of little importance.
Egan, who set up surveying firm Egan Lawson 18 years ago, has two properties in the popular French Alpine ski resort Meribel, but the investment aspect of the purchase is very much secondary to his the love of the piste.
“Meribel is the biggest ski area in the world, so you are never going to get bored there.” says Egan.
Indeed, his love of the resort has led to 20 years of property ownership there, with the most recent purchases made six years ago, born out of a growing family and need for more space. He sold the flat he had and used the proceeds to help buy two chalets.
Dou du Pont, which has four bedrooms, was bought off plan and cost £300,000. Apart from the size, its location close to the bars and shops at the centre of the resortalso appealed.
The second chalet, Olivier, asix-bedroom, six-bathroom villa, was bought for £250,000. It needed a further £200,000 of TLC. “It was an existing chalet, about 15 years old and looking extremely tired. I bought it and then, two years later, completely rebuilt it,” says Egan.
“Dou du Pont was for the family, Olivier was more of a deal and so was more of a speculation,” he explains.
And never has the phrase “speculate to accumulate” rung more true. Egan estimates that Olivier is probably worth £1.5m now, and Dou du Pont £1.2m.
But these purchases are very much about the long term and a love of winter sports, rather than short-term capital gain.
The ski season lasts 16 weeks, during which Egan and his family spend six weeks at Dou du Pont. For the rest of the season it is rented out, which “more than covers the costs”.
A holiday company takes care of the rentals, ensuring that it is staffed and stocked. “The advantage is that we have a live-in chef at both chalets, so you are looked after, which means you can get on and enjoy the holiday. The only disadvantage is that we have to commit to the chalet when we want to use it, so we can’t just pop over,” he says.
When the sky is blue and the snow beckoning, no doubt it is hard to recall the process of purchasing the properties. Egan admits that it is a more complicated process than buying in the UK, and offers one piece of advice: “We use a French lawyer in the UK rather than a local UK lawyer.”
Outside the ski season, Egan uses the properties to raise money for good causes, loaning them as summer holiday prizes in charity auctions.
He has no plans to sell, describing the chalets as a “home away from home”, and does not care if they have dropped in value in recent months due to tougher market conditions.
“I’m going to keep them in the family as assets,” he says.
