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Cottage industry: Making a success of holiday lettings

Hard work – and a loan from the Agrticultural Mortgage Corporation – have added a profitable new dimension to a family-owned estate in Wigtownshire.

The many changes in the agricultural sector in recent years mean that simply farming the land is in many cases not enough to bring in adequate income to support a family or maintain the land.  Some landowners are being forced to diversify to secure a future for their business. 

The Agricultural Mortgage Corporation (AMC) has been working alongside farmers and landowners, offering them the help and financial support they need to branch out into something new which will work in conjunction with their existing farming practice, and bring in much-needed income. 

Corsewall Estate

Corsewall Estate in Wigtownshire, which has been in the Carrick-Buchanan family since 1820, is very much a success story when it comes to diversification. 

Located near Kirkcolm, on the northern tip of the Rhins of Galloway Peninsula, in Western Galloway, the estate is now run by Angus and Kate Carrick-Buchanan. Together they work hard to increase estate income through various projects. Corsewall Estate, which was formerly made up of seven separate farms, has now been reconfigured to offer two tenanted farming businesses which focus on beef and arable production. There are also extensive acres of woodland and gardens. 

Holiday accommodation

In 2012 Angus and Kate began letting luxury four-star self-catering holiday accommodation using some of the cottages on the estate. They now have a portfolio of five holiday properties including Garden Cottage, in the west wing of Corsewall House, Stables Cottage and High Clachan Farmhouse, which were both empty and run-down. Cedar Lodge in Portpatrick and the most recent addition, Home Farm Cottage, complete the portfolio which takes advantage of beautiful surroundings where wildlife is in abundance and many walks can be enjoyed through the woodland and estate gardens. 

AMC Funding

Galbraith agent Robert Taylor helped Angus and Kate to secure funding through AMC without which they would not have embarked on the restoration of Home Farm Cottage.  Angus explains: 

For us it’s all about the diversification of income streams and how you secure investment to establish viable estate businesses. Regular banks have a different offering to AMC. 

AMC is straightforward to deal with and provides long term certainty and security at competitive rates. 

Whilst we continue to work with our regular bank provider, AMC provides an alternative source of funding and via Galbraith we approached them successfully to fund the refurbishment of Home Farm Cottage. 

AMC together with our regular bank have helped Corsewall Estate to diversify into four distinct income streams, namely farming, renewables, holiday accommodation and commercial property. 

Diversification to holiday lettings

The most recent diversification to holiday accommodation has generated additional employment to the estate in the form of builders, electricians and plumbers, as well as a dedicated local team working on a regular basis to carry out maintenance, cleaning of the cottages and gardening, ensuring the cottages and surrounding area remain in great condition for years to come. 

Angus and Kate are very proud of the cottages they let. They add many personal touches - Kate’s homemade brownies on arrival are a favourite amongst guests, who also receive freshly made bread, butter, local jam and milk, as well as tea and coffee. Using local produce where possible is very important to Angus and Kate. Dogs are welcome in all cottages and dog biscuits produced locally are a much-loved treat. Angus and Kate’s own dogs, Stuay and Sybil, working cocker spaniels, can often be seen in the grounds and are very much part of the Corsewall team. 

Residential letting

Other properties on the estate, not suitable for holiday accommodation, are used as residential lets, providing another source of income, although the revenue from long term lets does not compare to the weekly income received from the holiday accommodation, especially in peak season. Galbraith recently worked with Angus and Kate to market and secure a tenant for a semi-detached cottage on the estate.

The new Private residential tenancy legislation (PRT) gives tenants more rights, with the grounds for repossession by a landlord being tightened and the notice period required to be given by a tenant now shortened to 28 days. All these factors add appeal to the holiday accommodation business. Nevertheless, a good tenant bringing in a steady income and taking responsibility for the council tax and utilities still makes long-term letting a secure and viable option. 

The success of a holiday accommodation business very much depends on the location. The Rhins of Galloway has great natural beauty, and the warmer climate influenced by the Gulf Stream brings visitors to the area all year round, with many returning year after year. Angus and Kate anticipate that the number of holiday lettings will double in the next five to 10 years.

An AMC Loan... Not Just For Farming

AMC were delighted to support Angus and Kate in their business and recognised the strengths in the estate through diversification.   

Many people think that AMC only lend for purely agricultural purposes, but a growing number of customers are seeing opportunities outwith farming and AMC sees diversification as complementary to any core farming business. 

The beauty of AMC loans is their lend and leave policy which allows the customer to carry on with improving revenue streams in full knowledge of the long-term support offered by AMC.  

Loans for up to 30 years can be taken and this can be for a mixture of requirements such as restructuring existing bank debt, providing working capital, paying out a partner share or simply improving the general fabric of the farmhouse and buildings. 

Whilst land purchase remains a major part of AMC’s business the ability to derive income from land continually becomes challenging as costs rise and lower food prices become the norm. 

Diversifying into tourism, as Angus has done, can really change the dynamics of an estate or farm for the better.