Second Home

Essential Guide to Buying a Second Home

Until a few years ago, the must-have second home was a French farmhouse in need of work. Nowadays, properties abroad have become less attractive as budget airlines have cut back on destinations and the weak pound has rendered restoration projects abroad less cost-effective.

Following are our top tips on investing in a second home, from where to look to the tax implications

Where to look for a second home

The benefits of buying a home nearer your main home are enormous. A second property within two hours’ drive, on the coast or in the country-side, is a realistic weekend retreat.

The UK’s top holiday home locations are picturesque and also well served with restaurants and leisure activities: Cornwall and Devon, north Norfolk, the Lake District, the Peak District and the Yorkshire Dales.

Things to consider when buying a second home

Second homes vs holiday homes

There are important distinctions between second homes and holiday homes. A purpose-built holiday home may not have planning permission as a year-round residence, so before you buy, think about whether you want your weekend retreat to become a retirement option in the fullness of time.

Finance

Unless you are a cash buyer, you will need to remortgage your home or take out a second loan. Do not rely on hiring out your second home for part of the year to cover the repayments; the holiday-let market is already flooded with landlords, both amateur and professional.

Tax implications

The lines between main and second homes are blurred, so decide which property you name as your principal private residence. Once you purchase a second home, you have two years in which you can “flip” it, which is where you sell it for profit. There is a 10-50% council tax reduction on a second property, but capital gains tax is payable on its resale.

What are the downsides of buying a second home?

In Devon, for example, some villages have reached second home saturation point, with newcomers snapping up half the properties. This brings with it antagonism from the local community, loss of local services, soaring property prices and the sense that you are holidaying in a tourist trap, which is precisely the feeling that second-homers want to avoid