What do Trinny and Susannah, a law student from Kenya and a car salesman have in common? They have all benefited from a brand-new concept that promises bravely to transform the fortunes of thousands of empty apartments in city-centre developments.
VH48 is the brainchild of the property investor Stuart Atkinson. Its purpose is simple: to fill vacant apartments with tenants. So far, so like any old letting agency. But this, as Atkinson explains, is where VH48 differs. “We are offering apartments that can be rented for anything from one night up to a period of months. It is a complete turn-key solution for the property investor. VH48 offers an immediate return, by matching an empty apartment with a steady stream of high-quality tenants looking for an alternative to staying in an hotel.”
Atkinson, who points out that VH stands for Virtual Hotel and 48 was added “because it sounds good”, was inspired by his experiences on the road as an IT systems boffin for companies such as NatWest and Egg. He has lived all over Britain and has wide experience of property markets and letting agencies, as tenant and investor.
Atkinson now lives in Matlock Bath, Derbyshire, with his wife and two children, aged 9 and 12. He also owns 35 apartments in Reading, Chester, Birmingham, Sheffield and Leeds. “I am an investor, though, not a landlord,” he says. “Being a landlord is labour-intensive, a full-time job. All I want to do is let my apartments, I don’t want to worry about replacing a broken glass. VH48 was set up for people like me.”
There are currently 20 properties available through VH48 in London, Leeds, Manchester and Chester. Atkinson plans to expand the brand, aiming for at least 100 apartments in those cities as well as others in Liverpool, Newcastle, Birmingham, Glasgow, Edinburgh, Bristol and Cardiff by the end of this year. “Consistent standards mean people will know that, if they rented a VH48 apartment in Leeds, they can take one in Bristol knowing the quality will be identical, right down to the teaspoons,” he says. VH48 aims for “contemporary boutique-hotel style”. So to matching teaspoons add comfortable sofa, decent sound systems and wi-fi technology, all must-haves, Atkinson says, to make the lonely executive feel at home.
Tenants include the production team of Trinny and Susannah’s BBC programme What Not To Wear, who rented an apartment at Clarence Dock in Leeds to film an episode of the makeover show. They also include the family of the Kenyan student Anne Mwangi, 22, who recently graduated in law from Leeds University. “My parents have been to England two or three times, but have always stayed in a hotel,” she says. “When they came over for my graduation they wanted a longer stay, so an hotel was not really suitable. We found VH48 on the internet and rented a two-bedroom, two-bathroom apartment in the centre of Leeds for £1,200 for the month. They liked the fact that there were no set mealtimes, so my mother could cook what she liked.”
Atkinson says: “Our product is cheaper than an hotel and it gives tenants better accommodation. The people who like hotel accommodation the least are those who have to stay in it.”
He believes that most VH48 tenants will be employees seconded away from company headquarters and argues that his service is more cost-effective than putting up staff in hotels long-term.
As an example, he cites a two-bedroom apartment at Granary Wharf in Leeds which would cost £35 a night if leased for a month, compared with the average Leeds city-centre budget hotel rate of £55-£60 a night. “Flexibility of tenancy periods is key to the product,” he says. “An apartment can be rented from a few days to several months or years. A sliding scale means shorter-term tenants pay a premium which decreases as the period of the lease increases.”
Apartments are booked online via VH48’s website and paid for by credit card. Clients are vetted and financial details checked by VH48.
For investors, the attraction of letting through VH48 is a higher rent than they might get through a usual assured shorthold tenancy, and the constant availability of quick-turnover tenants. To get on the books a property owner must pay an annual management fee of £500 plus VAT, and an annual marketing fee of £250 plus VAT. Rent received goes straight to the owner and VH48 does not take a cut. Atkinson, shrewd businessman that he is, is not running a charity, though. Overheads are low because much of the checking and vetting is outsourced. VH48 makes its profit from the upfront fees and through furnishing the flats for investors via approved suppliers.
Brand-new apartments are kitted out from scratch to meet demanding standards. If the interior doesn’t cut it, the investor has to rip out all his stuff and start again at his own cost. “It always amazes me that someone will happily spend a quarter of a million on a smart apartment and then be aghast that they have to spend any money at all furnishing it,” Atkinson says. It sounds tough, and it might cost, he estimates, about £6,000 to furnish a typical empty two-bedroom, two-bathroom apartment to meet the company’s standards.
Steve Harper, who lives in Bushey, Hertfordshire, owns several buy-to-let properties in Britain and Spain, renting out a two-bedroom, seventh-floor apartment in the City Island development in Leeds through VH48. Harper, 43, a corporate sales manager for BMW, expects to receive £1,000 a month in rent, rather than £750-£850 a month for a traditional six-month tenancy. He spent £3,500 on VH48-recommended fixtures and fittings.
The return, he agrees, is only fractionally higher and there have been empty periods. Harper has confidence in the management offered by VH48 and is not concerned that a procession of short-term tenants will exacerbate problems such as wear and tear. He does acknowledge that he is going out on a limb by letting through VH48, but says: “In this day and age it is important that investors realise things need to be done differently”.
His main hope is that the reputation of VH48 will take off and bring him plenty of tenants. Harper bought his Leeds apartment through a property club. “I was considering selling it before it was completed because of the general slowdown in the market,” he said. “Then I thought about letting it out, so I put ‘letting companies and Leeds’ into Google and came across VH48.”
The thinking behind VH48 is so straightforward it is surprising it has taken so long for anyone to come up with it. Relocation agencies will take on flats to rent out for short periods, for instance, but the concept of finding or letting an apartment yourself from your own desk, with only a credit card, is revolutionary. Can it also prompt a revolution in oversold, over-supplied city-centre developments? Stuart Atkinson can’t be the only one hoping that it will.
www.vh48.co.uk, 0845 6762064
