Second Home Ownership up 30%
Holiday Home and Buy-to Let Mortgages
New research by the Resolution Foundation1 shows one in ten British adults now has a second property. Between 2000 and 2014, the proportion of adults owning more than one property rose by 30%. While overall home ownership has dropped this century as prices skyrocketed, it’s estimated that 5.2m people own multiple properties. Surprisingly, about two-thirds of these owners aren’t landlords – just 3.4% of adults (equivalent to 34% of the one in ten) are letting out their properties.
The appeal of owning a second property isn’t hard to see. People with second homes not only have a property that they can sell if they need to, for instance to pay for care in later life, they also have the opportunity of earning rental income from it, albeit subject to some unhelpful tax changes. With interest rates remaining low, property returns can look far more attractive than savings accounts, though property values can fall.
Home ownership issues
Second homes include holiday cottages, flats used by other family members, city pads, and properties that have been inherited and where the new owners are still considering their options. With the number of people who do not own a home having risen sharply over the last 12 years – it’s now 40% of adults, up from 35% in 2002 – housing campaigners have called for action to redress the balance.
The introduction of additional rates of stamp duty on second homes was a move in that direction, as was the reduction in tax relief on mortgage interest paid by buy-to-let landlords that came into effect from April this year. The continuing lack of affordable property for first-time buyers and essential workers has led to some local councils, notably St Ives in Cornwall, imposing a ban on the building of property for second home ownership.
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1Resolution Foundation, 2017