Business clinic: How do we prove holiday use is not viable?

Whether you have a legal, tax, insurance, management or land issue, Farmers Weekly’s Business Clinic experts can help.

Here, Nicola Palfrey of Carter Jonas advises on what evidence is needed to show that a permitted holiday use is no longer viable.

See also: Business clinic – what to know when renting out cattle housing

Q. How do you prove that the permitted use of a building is no longer viable? We have a holiday cottage which is a small converted farm building. It is now within the recently changed development boundary of the village.

The planning permission for its use as a granny annexe / holiday let was granted in 2017, with conditions limiting occupancy to a family member (granny annexe use) or 56 days a year to anyone else (holiday let use).

The Local Planning Authority (LPA) agrees that the original reasons for attaching the conditions are no longer relevant but will not remove the conditions as it wishes the cottage to be kept as tourist accommodation even though it can be used as a granny annexe or simply left empty.

The LPA wants evidence that is no longer viable as holiday accommodation but will not say exactly what it requires. I have contacted the LPA several times, made a planning application and appealed and it is still not clear to me.

A. You haven’t specified the reason for wanting to have the restrictions lifted, but it’s worth noting that there is the possibility that there is a Section 106 agreement in place linking the annexe to your main house. If this is so, it would preclude you from selling the annexe independently.

A planning consultant will be able to look into this and advise on your specific circumstances.

Back to your question – in order to prove that the holiday let use is no longer viable, you will need to get a viability assessment carried out and provide this to the LPA.

This will determine what the occupancy rate is to make the holiday let a viable project, and then you will need to supply evidence that this rate is not achievable. This should be based on occupancy over the past few years, as well as current demand.

Following the lockdown, holiday accommodation was allowed to reopen from 4 July, and since then our leisure team has found that holiday letting operators have confirmed that the ‘staycation’ is having a resurgence.

Many people are understandably worried about going abroad due both to the travel involved and the risk of having to quarantine on their return.

These factors and the weather have meant that such businesses have been able to increase prices and have enjoyed packed schedules.

My advice would be to capitalise on this strong market for this year and next and look to get your viability assessment carried out when the trend moves back towards holidaying abroad.

You will need to have the report produced independently so that they are impartial to the planning application and are purely assessing the business/project.

This is also normally confidential due to the level of financial information required, and therefore not available to be viewed on the LPA website.

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