Brits snap up second homes in new property boom

The number of English households owning second homes elsewhere in Britain is growing rapidly, according to fresh research from the government.

A growing number of homeowners are now choosing to deploy their extra cash for investment and leisure returns in a second property elsewhere in the country.

The figures from the Survey of English Housing show a 15 per cent increase on last year's figure, representing the 295,000 households registering a second home in England in 2003-04.

The South-West proved the most popular for second-timers with 22 per cent of homes located in the region, just beating the healthy rates of secondary start-up reported in the South–East.

London's popular 12 per cent rate was explained by commuters buying up Pieds à terre properties near their workplace for ease and convenience of travel.

Lincolnshire, North Yorkshire and Northamptonshire were found to be the survey's most undiscovered areas, where there is a growing demand for second properties.

Prices were said to be highest in coastal regions and tourist honey-pots, such as Devon, Cornwall and Suffolk.

Richard Donnell, head of residential research at FPDSavillis, the property consultancy, explained that long-term wealth of Brits has grown.

"As the nation becomes wealthier levels of discretionary spending increase. Second homes are the ultimate discretionary purchase, an extension of the car and the holiday."

The number of English households owning a second home abroad has also risen significantly, up 14 per cent to 177,000.

Hot locations include France, ranked second in the survey and Spain, the clear favourite, which together account for nearly 60 per cent of second properties abroad.

Italy registers only one per cent of British overseas property investments, below the US which shows 5 per cent and Portugal, which has 2 per cent.

According to the poll, the decision to buy a second residence abroad is made because Brits want a holiday-home, a weekend cottage or a place other than England in which to retire.

Fewer than 30 per cent with second homes in the UK and just 7 per cent with second homes abroad buy them exclusively as an investment.

The Inland Revenue is reported to have taken an interest in the findings as many overseas buyers have set up company structure to overcome local tax laws.

Some advisors have suggested the taxman could see such a structure as creating a tax loophole, and intends to issue guidance in the future.

 

14th September 2004

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