Assetz® News - Brits lured by prospect of second home

Brits lured by prospect of second home

25th April 2006 |

New research indicates that there are as many as 350,000 second homes in England, while it is estimated that Britons own another 260,000 abroad.

Passion for homeownership in the UK is legendary, but the new survey from Savills indicates that there is also a growing enthusiasm for owning a second property.

As reported by the Daily Mail, the total of 600,000 second homes owned by Brits is the equivalent to more than the entire population of Sheffield owning a property in South Yorkshire and another elsewhere and it is a trend that experts suggest will only escalate as levels of disposable income rise.

Furthermore, increasing numbers are purchasing a second property with a view to supplementing income, with buy-to-let mortgages growing in popularity in the UK.

Rental demand is competitively high across the UK but many investors are also tempted by the prospect of renting out a property abroad, with the likes of Spain and France particularly lucrative because of demand from the tourist market.

Investors often see Spain as a particularly sensible choice, not least because of the increasing number of budget airlines opening new routes to the country.

A study carried out last year by Savills Private Finance found that Spain remains a hot favourite among investors hoping to combine pleasure and profit.

It is perhaps understandable, with many investors finding they can let out a property for around 25 weeks a year to cover the cost of the mortgage. With house prices continuing to grow in the country, this has become a popular strategy with British investors, with the golf resorts proving especially lucrative as demand extends beyond the usual summer months.

According to the new Savills report, there are some local authorities in England where around one in three homes are second homes - generally only used at weekends or during holiday periods.

This is particularly true of rural areas, with towns such as Burnham Overy and Brancaster in north Norfolk classic examples. The Lake District similarly attracts second home hunters, but astute investors in both areas typically look to generate income through rental returns and capital growth.

The Kent coast may well be the next hotspot for second homes, according to Savills, on the basis that prices are still fairly low and plans are underway for a high-speed rail link into the capital.

Of those who have bought a second home abroad, around one in four decided on Spain. Interestingly, most plan to spend around six months in their overseas property during the winter months, which clearly leaves the summer months to maximise the rental potential.

Owning a second home undoubtedly offers a range of benefits from convenient holiday breaks to the financial benefits of investment. For a mixture of both factors, it seems certain that the number of Brits owning a second property will continue to rise into the foreseeable future, while there are no signs of the current enthusiasm for buy-to-let abating.