Robert Powell looks into the best places to buy a second home.
At a glance, now may not appear to be the best time for anyone to purchase a second property.
But while a rapidly changing economy undoubtedly sparks disasters, it also creates opportunities. And that’s why, for some anyway, a second property may prove a wise investment in these tough economic times.
Holiday homes
As purse strings tighten across the country, more and more people are deciding to shun pricey overseas holidays in favour of a ‘staycation’. As a result, the self-catering ‘cottage holiday’ market is booming.
The website holidaylettings.co.uk recently reported that booking enquiries were up by 40% year-on-year in 2011, with a further increase in demand expected over the next 12 months. Kate Stinchcombe-Gillies, a spokesperson from the site said: “Already the UK is the most popular destination for all school holiday periods ahead of the main summer break – three times more popular than any other destination for the Jubilee June half term week.”
The portal’s Holiday Lettings Insights Report also found that 25% of those surveyed would consider investing in a holiday cottage to supplement their income. For many, a second home can offer the flexibility of an additional income stream, a destination for holiday periods and a relatively safe investment opportunity.
Nigel Lewis, a property analyst from Primelocation.com, said: “A factor driving the second homes market forward is the poor rate of return being offered by more traditional investments such as bank deposits, stocks and shares and even ISAs, leading many to see a second home as a more promising place to invest their capital in the medium-to-long term.”
Most popular locations
Stats from Primelocation.com name Cornwall as the UK’s second home centre. The local authority has 14,095 second homes – 5.6% of the total housing stock of 251,597. The average price comes in at £247,432.
Westminster, where one in 16 properties are second homes, follows Cornwall, but predictably has a huge average price of £1,048,599. The London local authorities Kensington & Chelsea, Camden and Tower Hamlets also feature in the top ten, pointing to a high demand for ‘Monday to Friday’ work flats.
South Hams in Devon – home to famous, picturesque towns such as Totnes and Salcombe - is another second home bubble. Almost 10% of all houses in this local authority are second homes, the highest percentage in the UK. The average price of a second home in this area is £331,477.
North Norfolk also places highly on the list. Over 9% of all houses here are second homes and the average price is £275,606.
Holidays lets
For those looking to buy a second home to let out, stats from holidaylettings.co.uk detailing the ten most enquired about areas in the UK also place London high up the list. Peak season prices for a two-bedroom apartment in Zone One of the capital can stretch right up to £8,162 per week – buoyed by the Olympics and Jubilee celebrations.
As an investment, London property seems pretty safe. The latest Rightmove House Price Index shows that property values in the capital rose 6.1% in the 12 months to January 2012. But with an average property price of £438,324, there’s a price to pay if you want to tap into this lucrative market.
Brighton and Hove tops the holidaylettings.co.uk list; peak prices here range between £380 and £850 per week for a studio or one-bedroom apartment. On the cottage side, the New Forest places highly with a two-bedroom costing anywhere between £359 and £895 per week. Bath is another in-demand location, popular for its surrounding villages and good transport links. A two-bedroom apartment here can make you anywhere between £440 and £2,100 per week during peak times.
Of course, practical considerations will influence the location of any second home purchase. Most obviously, if you’re planning on self-managing you’ll need to buy close to your own property. Using a management service will free you up location-wise and allow you to buy in a strong and profitable ‘second home bubble’, but you’ll have to pay for the privilege.
However it’s not just those with designated holiday cottages that can take advantage of the modern staycation surge.
Social accommodation
Social accommodation allows you to cash in on any spare space you may have by advertising online and renting it out to holidaymakers, travellers and just about anyone else who’s after a place to rest their head.
Wimdu is one of the biggest platforms boasting 35,000 accommodation options across 100 countries.
It allows you to list spare rooms, apartments and any other accommodation spaces online, view the profiles of guests who are interested in your property and exchange messages with them prior to a booking. From here, payment is taken from the guests via Wimdu and then released to the host 24 hours after check in.
It costs nothing to list your space on Wimdu; however you will pay a 3% processing fee when a booking is made.
Again, London is a hotspot for social lettings in the UK, especially in 2012. Over the Olympic period, hosts in the centre of the capital can expect to earn £200 per night just for a spare room.
Your take
If you were to buy a second home, what and where would it be?
Let us know using the comment box below.
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