Beach hut owners on council land are facing price rises of hundreds of pounds in their annual rents – but attractive new lease benefits are on offer to lessen the impact.
The rent increases, if approved, will be phased in to ease pressures – and will be combined with more attractive ten year leases to replace the current three year licences.
Greater long-term security
The new arrangements will give owners greater long-term security and also make it far easier for them to cash in on their seaside huts if they choose.
The council owns the freehold of the land on which the beach huts sit – and the huts themselves are owned by the current licence holders.
Recently one at Puckpool, Ryde was sold on by a licence holder for £22,000.
Change from three year licence to ten year leases
Isle of Wight council leader, Councillor Dave Stewart, said,
“People with beach huts have an asset from which they can get great enjoyment and can potentially gain financially if they choose, and we are planning a fair and standardised market rent for the ultimate benefit of all Island residents.
“We have had a review of rent valuations to bring them right up to date – and remove current disparities between smaller and larger huts.
“The change from three year licences to ten year leases, will give more security of tenure and make the huts more marketable for the owners if they choose to sell.
“The income from a sale goes entirely to the leaseholder of the beach hut and not to the council, other than a small transfer fee – so they really can benefit financially.
“Beach hut sites are a key asset for all the Island’s residents not just the huts’ owners – and the rental income rightly goes into the pot to spend on all council services, and increases will mean more money in vital areas. This is part of our commercialisation strategy.”
Areas affected
The proposed changes are in a delegated decision report published today (22 May) on the 174 beach huts at Appley and Puckpool, Ryde; Gurnard; East Cowes; and Old Littlestairs, Shanklin. Those at Dunroamin, Sandown and Madeira Road, Colwell will be considered separately at a future date.
Currently the ground rent, with some variations, is £308 a year.
Based on a new valuation of £162.03 per square metre, the figures would rise to between £608 and £1,296.
But this would be phased in over three years from next April, buying time for owners to adjust to the change – and there will be a new system of payment by monthly instalment to spread the cost.
Leader: A “market-attuned approach”
Councillor Stewart said,
“There have been anomalies in the charges for many years. In some locations beach hut owners have clearly benefited compared to others. The new rents will be a fairer and market-attuned approach.
“Of course we recognise that beach huts have brought great joy and have much emotional importance for many generations of families – and we hope this experience continues.
“It is also well documented that beach huts in some mainland resorts have been sold for substantial amounts. There is clearly a market and many existing beach hut owners on the Island are sitting on potentially very marketable assets.”
Factfile
- Currently there are some huts which are 3.75 square metres, and others which are far bigger, but all are charged a similar ground rent.
- The last review of ground rents was in 2010, with any increase since then in line with the retail price index.
- New lease benefits proposed include: greater security of tenure through ten year leases; no sale restriction anymore to buyers who are only on the Island’s electoral register; more freedom for hut external decoration; and for the next ten years any rent increases would only be in line with inflation.
- The current licences are for three years only – but the change to ten year leases grants ‘exclusive possession’, making it potentially easier to take out a loan to buy a hut.
- If, during the phasing in of the ground rent increases, a beach hut owner feels it is too expensive for them they can market and sell on the lease at potential financial gain.
- Separate new-build beach huts can provide a key financial boost to council funds. Recently the council has invested in its own new beach hut scheme – and since July 2017 at Colwell it has already agreed £10,000 ten-year leases for eight out of 20 new beach huts, and is confident the remainder will soon sell. The additional annual ground rent for these, at the market rate of £162.03 per square metre, brings in crucial extra income.
- The phased increase in beach hut rentals would generate an extra £106,000 a year for council services by 2021/22.
Officer’s report explaining the justification
News shared on behalf of the Isle of Wight council. In their own words. Ed
Image: © Christian Beasley
