Sentiment surrounding second homes soars
Tue 15 Sep 2020
Paul Bennett, Director
Whether you have a bolthole on the coast or a bijou pad in the city, having a second home to escape to has always summed up the epitome of style. And if new research by The Guild of Property Professionals is to be believed, the number of people who own an additional property is set to grow from its estimated 1 million.
The organisation found a third of Brits either currently own a second home or are thinking of buying an additional property in the UK. Those more likely to make another purchase on home turf are professionals between the age of 35 and 44, claims The Guild.
As well as residents who are looking to increase the number of UK homes they own, there is suggestion from within the property industry that expats are beginning to relook at their home country. Although many are not willing to give up their overseas holiday home entirely, they are increasingly considering a purchase back in the UK so they can split their time between two homes on a more 50-50 basis, or rent out a property in the UK with a view of moving to it permanently later in life.
Encouraging the purchase of a second home is the temporary stamp duty freeze. Although second home buyers will still have to pay a 3% surcharge tax, they can enjoy a saving of up to £15,000 on the actual purchase. Of note is the deadline – those wishing to qualify need to complete on a property by 31st March 2021.
And as the current stamp duty holiday ends, another new stamp duty initiative will begin. As of 1st April 2021, British expats working and living overseas will have to pay a new 2% stamp duty surcharge if they buy a property in the UK. This will be in addition to the 3% rate for those who already own a property. This combined should prompt second home purchasers to make their move sooner rather than later.
Interestingly, when looking at the reverse of buying a second home in the UK, research by Canada Life found 46% of over-50s who favoured the idea of retiring overseas are now reconsidering their plans, with Brexit, general uncertainty and Covid concerns cited as reasons.
We expect to field enquiries in the coming months from buyers and sellers who are looking to reconcile their property portfolios. Among those will be homeowners selling a substantial singular London property in favour of purchasing two smaller homes in different locations, and expats looking to secure a London base with excellent ‘lock up and leave’ credentials.
If you have a property that would be ideal, or have plans to make an additional property purchase, contact Behr & Butchoff today.