As news stories abound of the difficulty faced by many to get on the property ladder, plenty of homeowners are remaining optimistic about the future.
One in eight homeowning Brits are planning to invest in second homes over the next decade, according to a study by coverbuilder.co.uk looking at adults who’d bought a home within the last 10 years.
The results showed a level of optimism in the market despite the 3% second home stamp duty surcharge that has been in effect since 2016. However, it remains to be seen whether the Autumn Budget will address property taxes next week.
The highest numbers of people looking to purchase a second property were in the south-east (16%), the south-west (15%) and Scotland (12%).
However, of the 12% who said they intended to buy a second property, 71% said they had not yet researched the cost implications associated with second home ownership, including stamp duty, surcharges and other aspects related to buy-to-let mortgages or holiday home rental.
The right choice?
It seems that a larger number of people would rather spend money on their existing homes, with 59% planning to add extra rooms, 47% planning to remodel their property, and 32% hoping to rent out a spare room to a lodger or tenant.
Rob Rushton, head of coverbuilder.co.uk said: “To purchase a buy-to-let or not to purchase a buy-to-let, that is the question. In theory there are many benefits to owning a second property, but unless you are fully prepared for the reality of the additional financial costs, legal requirements and have a sufficient amount of funds to fall back on, then it might not be the best financial investment for you.”
Figures published earlier this year showed that one in 10 Brits already own a second home, and there’s been a massive influx in multiple property ownership over the past 14 years – from 1.6 million in 2000 to 5.2 million in 2014.
Laura Gardiner, senior policy analyst at the Resolution Foundation, took a more positive view of the market than Rushton.
“Multiple property ownership is still a minority sport, but a growing one that represents a significant boost to the wealth pots of those lucky enough to own second homes,” she said. “People with second homes not only have an investment that they can turn to in times of need, for instance in later life when care is required, but if the property is rented out they also see a boost to their incomes here and now.”