Second Home UK Hotspots
If your considering buying a second home in the UK but are not sure where to buy you ay want to research the popular hotspots and the pros and cons of owning a second property in a popular destination. You wont be alone. There is a growing trend of second home ownership in the UK. In 2009 there were 245,384 registered second homes in the UK. This is predicted to rise by 3% year on year. A new study from Direct Line Home Insurance reveals that by 2015, the number of people buying second homes in the UK will rise by 24 per cent to 405,000 – 156,000 more second properties will be owned overseas.
Despite the economic downturn the UK population is much more affluent than it was 20 years ago. Many middle-aged people are seeking retirement income derived from a second property because promised stock market returns for pension planning has failed them. There is also an ageing population in the United Kingdom which are choosing to retire in a quiet and safe villages and communities. Spending by 55-64 year olds rose by 17.2% to £2.9bn and that by the over-65s by 26.4% to £2.2bn, in the three years to January 2010. The general improvements in transport links and healthcare means that there are many areas of the UK which could not host comfortable second homes.
The ageing population is also increasing their levels of disposable income as the gap between rich and poor widens. Lastly the improvements in average temperatures in UK has tempted many Brits to opt to buy a holiday home or second home city in southern areas of England. Recently extreme weather conditions during winter from freezing snow and flooding represents the other side of this climate change coin. Both these factors have pushed up second home insurance premiums for owners where the property is at greater risk from flood damage or from vandalism due to it being empty for long periods of time.
As more and more people are choosing to holiday in the UK, many seaside coastal areas are becoming popular hotspots. In particular Exmoor and Southend. The top second-home hotspots in 2009 were in the South Hams area in Devon, including locations such as Dittisham, Kingswear and Salcombe. Nearly 10% of homes in the South Hams district are registered as second homes! There is also a growing trend of city workers buying homes near to office. In the City of London, almost 25% of residential units in were classified as second homes in 2009.
Second home owners see the convenience of travelling to their home as one of the primary factors for buying in the UK and not abroad. In addition there is a natural desire for British culture and no language barriers to confuse the buying process. If it’s a lifestyle change you desire and you’re more concerned about the quality of the general area (than an individual property) why not take a holiday there first, to get real flavour for what the area is like and people. For many people buying a second property is all about the location. Finding a tranquil and relaxing place to get away with family and friends in a community where locals are friendly. Beware though that huge influx of second home owners in hotspots has created resentment and some local communities (who now cannot afford to get onto the property ladder due to an increase in local property prices).
Prior to the increases in air fares many UK expatriates were snapping up holiday homes in overseas destinations such as Spain, France, Greece, Florida and other sunshine resorts. However the stranglehold on mortgage finance and falling overseas property prices has killed off the overseas markets. In addition many UK investors can now only access a limited number of mortgage products designed for second homes as long as they are located in the UK.
Although the UK is a relatively stable and healthy property market the long term, the huge boom in the last 15 years and subsequent fall in prices has left many lenders nervous about offering additional finance for people seeking to purchase second homes. Despite these challenges the trend is still good for quality second home investments. Knight Frank noted recently that ‘the growing demand throughout the year is reducing void periods and boosting yields, with the result that good quality holiday lets in the right locations can now achieve higher yields than properties let on short hold tenancies.’
Contact Assetsure for a Second Home Insurance quote.