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Buy-to-let operator Owner Hotels falls into administration

14 July 2009 by
Buy-to-let operator Owner Hotels falls into administration

Troubled buy-to-let firm Owner Hotels has collapsed into administration after closing both its properties in Yorkshire.

Administrators Ernst & Young were called into the Hull-based firm last Friday after the group "incurred significant trading losses".

Owner Hotels owns the freeholds of two hotels in Yorkshire, the 27-bedroom Owner Hotel on Albion Street in Hull, and the 22-bedroom The Jorvik Hotel on Marygate in York.

The majority of the rooms in both hotels are owned by private investors, under a lease scheme, with a small number of rooms remaining under the ownership of the hotels.

Owner Hotels uses a model where an investor buys a hotel room on a 999-year leasehold basis with prices ranging from £70,000 to £120,000. The investor is then entitled to stay in the hotel for up to 52 nights a year free of charge and receive 50% of the net room rate, with a guaranteed annual return of between 8% and 15%.

Ernst & Young has also been appointed as liquidators of Owner Hotel Management Limited, the company responsible for the operation of the hotels and employment of 24 staff across the two locations.

Charles King, restructuring director at Ernst & Young, said: "The hotels have incurred significant trading losses and as a result it has not been possible to keep them open in the short term.

"We are attempting to assist guests in finding alternative arrangements and are working with the room owners to explore the possibility of re-opening the hotels."

Owner Hotels first started to experience difficulties in April this year when the firm, which is headed up by Andy Woodcock and Julie Walker, were faced with a staff walkout at its Hull property who claimed they had not been paid.

Several investors have also claimed to have not received money owed to them in recent months.

Owner Hotels was unavailable for comment.

Buy-to-let group Owner Hotels closes York property >>

Owner Hotels on the edge of administration >>

Hotel buy-to-let model is under threat as GuestInvest fails >>

By Gemma Sharkey

E-mail your comments to Gemma Sharkey here.

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