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There's no place like (holiday) home

6th May 2005 | back to article listings BACK    print this article PRINT

With reports of a rising number of property investors looking overseas for cheaper investment opportunities and relatively high prices at home, you could be forgiven for assuming that the second home market in the UK is facing something of a decline. However, new reports indicate otherwise, with figures showing the market to be fairly strong, particularly in the south.

According to research undertaken by property consultants Savills, nearly 230,000 properties in England are second homes. In London, where the concentration of second homes is highest, the proportion sits at a notably high 27 per cent of all housing and a quarter of all second homes are in the south-west. To an extent, this counters the idea that buyers are put off property investment in more expensive regions, perhaps suggesting that more investors are being drawn to higher value properties with a view to longer term investment benefits.

Though London has the highest concentration of second homes the highest number was found to be in the Isles of Scilly, with holiday homes accounting for over one in five properties. The upshot of this is that more property investors in the UK are choosing to holiday in the UK, as opposed to popular sunnier destinations such as the south of France, Spain and Cyprus.

This is especially so for older buyers looking for a retirement home who may be reluctant to uproot. Across north Cornwall one in ten properties are second homes while almost ten per cent of properties in Penwith, Cornwall, are holiday residences. Other hotspots include Berwick-upon-Tweed in Northumberland, north Norfolk and Cumbria.

Apart from holiday homes used for retirement, traditional holidays or weekend breaks, many younger buyers are investing in out-of-town properties for weekend city breaks, targeting much the same areas as their older peers. Conversely, many out of towners are looking for homes in greater London in a bid to invest in a so-called 'city-base' and avoid a lengthy commute.

Though healthy, the UK second homes market has not shown any major signs of growth over the past 12 months, and emphasis remains on buy-to-let as opposed to personal residential use. As well as this, recent legislative changes have made it potentially more costly to own a second home, with local authorities having been given the option to charge up to 90 per cent of the full bill on second homes. Up until last year homeowners were eligible for a 50 per cent reduction in rates.

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