Owning a second home is a dream come true for many. It brings opportunities to enjoy regular family holidays, to generate an additional income in the off-season and perhaps even an investment for retirement.
Like most buyers in today’s market, getting the initial capital together is a priority. Unless you’re a cash buyer, most homeowners remortgage their main residence, or take out a second loan, in order to afford payments.
If you’re buying a second house with the intention to sell it later down the line or as a buy-to-let then remember that, as of 1st April 2016, anyone paying more than £40,000 for a second property faces a 3% Stamp Duty Land Tax surcharge. What’s more, capital gains tax is payable on the resale of a second house.
Location, location, location
Location is important too. A second home that is within one or two hours travel time from your main residence is more likely to be used regularly as a weekend getaway and summer or winter holiday retreat.
But do your homework before you buy. Not only are some holiday homes restricted by planning permission but popular areas in the UK are becoming increasingly hostile towards second property owners. This is because more and more young people are struggling to become first time buyers, and are being priced out of their local area. St Ives, Cornwall, even held a vote to ban second home purchases.
The local community can often be what attracts a buyer to a particular area but that will soon change if the only homeowners nearby are all holidaymakers! In which case, purpose-built developments could be the happy compromise for a home from home in a beloved location.