Hotel unable to pay back commercial mortgage leading to dwelling use

An appellant in Dorset provided sufficient information to demonstrate to an inspector that she could not afford to repay a commercial mortgage and draw an appropriate salary for running a small hotel, thereby justifying its change of use to a dwellinghouse.

Business accounts demonstrated that the net profit had remained relatively constant since 2008. The appellant had recently begun to repay both the interest and capital on the mortgage. This had increased costs compared to her previous decision to pay the interest only, the inspector concluded. Profits would fall to such a level as to provide no money to the appellant in the form of a salary. It was not an unreasonable expectation for a viable business to be able to pay back a reasonable level of borrowing. In order to compete with national hotel chains further capital investment in the bedrooms including adding en-suites would be necessary.

Traditional guest houses were giving way to larger chains and the appeal site appeared to be a casualty of this trend, the inspector held. The hotel had been marketed on and off for the past three years with only a constant period of 12 months which was less than the 18 months stipulated in the council’s supplementary planning guidance. In the inspector's experience 12 months was a sufficient period of time. Two offers had been received and accepted but the prospective purchasers were unable to proceed. The guide price was realistic and in view of the inability to sell the hotel coupled with poor viability its conversion to a dwelling was permitted.

Inspector: Graham Chamberlain; Written representations


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