Regional Spotlight: North-west

Demand for hotels in the North-west of England shows no sign of letting up in the final quarter of 2004, although the shortage of available properties is acting as a brake to growth in the market and keeping prices robust.

Property agent Christie & Co is reporting high demand for hotels of all types, and in the first seven months of this year its Manchester office, which is responsible for the North-west market, sold more than £30m-worth of hotels.

"As other forms of investment continue to produce lower-than-desired returns, hotels are seen as a good investment proposition," says David Blythe, director at the company's Manchester Office and head of the hotel division.

He adds: "All types of hotels are sought - by those seeking to escape busy city life and stressful jobs to opt for a more relaxed lifestyle, and by the corporate end of the market. The difficulty for hotel owners is knowing when is the best time to sell their hotels."

The widely predicted slowdown in the residential market and gradually rising interest rates will have a knock-on effect on the hotel sector.

However, at the moment, with house prices strong and interest rates being held at a relatively low level, aspiring purchasers have substantial equity to reinvest in buying a hotel - particularly since the values of hotels have not soared at the same meteoric rate.

"As a result," Blythe says, "buyers can purchase a higher value hotel today than they would have been able to afford a decade ago."