Buying and selling a Beach Hut – Q&A
Posted on: 08/11/2021
The Staycation. The trend is becoming extremely popular; and with it, so are Beach Huts!
The price of beach huts are at an all-time high. A Mudeford Sandbank beach hut recently went on sale for a whopping £575,000!
So, what’s the attraction with beach huts?
Well, they can be great way to spend time with family and friends right on the beach front. Not only that, but they also can provide a rental income too.
With beach huts being so popular, and lots of people looking to buy or sell, we thought it would be a good idea to answer some common questions.
Fiona Knight answers your questions on buying and selling a beach hut.
How much does a beach hut cost?
It can vary widely! We have recently acted on sales at £45,000 and £20,000 but its not uncommon for beach huts on the exclusive Mudeford Sandbank in Dorset to go for £350,000 and above!
Do beach huts hold their value?
Generally, beach huts hold their value in the early years of the lease duration but not towards the end. There is no automatic right to extend the lease period or to buy a further lease.
This will have to be negotiated with the landowner (usually the local Council) and paid for at the market rate at the time assuming the landowner does not want the site back.
What associated costs are there when buying a beach hut?
Possibly Stamp Duty Land Tax, Land Registry fees and notice fees with the landowner.
If the purchase price is over £150,000 then there will be stamp duty land tax to pay.
If the lease period is over 7 years then it must be registered at the Land Registry. Any subsequent sale of the lease will also need to be registered at the Land Registry.
Notice of the transfer will also need to be served on the landowner and their fees paid.
What associated costs are there when selling a beach hut?
When selling, most leases provide that you have to offer the lease back to the landowner first and if they do not wish to buy back the lease, then the seller has to pay the landowner a Transfer Fee.
This is often 15% of the sale price or market value of the beach hut whichever is higher. If there is less than 3 years since the beach hut was first sold, then vat could be payable on the Transfer Fee.
The seller will also have to pay the landowner’s legal fees, surveyor’s fees and sometimes Seafront Services fees for issuing the formal consent to the sale. Plus any unpaid service charges will have to be paid up to date.
Do you need a solicitor to buy a beach hut?
It is advisable although not a legal requirement. Any lease is a complex document. A beach hut is a commercial lease and so the Landlord and Tenant Act 1954 applies.
A formal license document will need to be entered into with the landowner by the seller and the buyer before the sale can complete.
The price for a new beach hut could be subject to VAT. The owner of the beach hut will be liable for business rates unless the buyer qualifies for an exemption.
The owner will require specialist insurance including public liability. Some leases require public liability insurance cover of £2 million cover for any single claim.
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