[intro] If finances will allow, or if you stand to make a profit, then perhaps the question should be why not? Given the current low interest rates and a boom in spending by people approaching their retirement years, second homes have become increasingly popular in the UK. The four main reasons people choose to purchase another property are: [/intro]
As a retirement property
Many people are choosing to relocate to more rural areas when approaching retirement. Often their priorities in a home change, they may need less space and less maintenance. Once work is no longer a factor they can enjoy a more picturesque location, perhaps move closer to family members or simply be closer to local amenities and services.
Why Buy Second Homes?
To generate a rental income
A second income from a rental property is a very attractive investment option. With the current demand for housing, letting properties is not the headache it used to be. Depending on where you purchase your second property there is no shortage of willing tenants, for example; on a commuting route or in a university town. Location is crucial when buying a successful buy-to-let.
To restore and sell on for a profit
Following the popularity of TV based restoration programmes and the growing interest in property auctions, there is an investment trend to buy, renovate and sell second homes on at a profit. For people with the right knowledge and expertise this can prove particularly lucrative.Get a Quote
As a holiday home
Many people are preferring to holiday in the UK; investing in a second home as a holiday let not only adds to their investment portfolio, but also offers a bolthole for the family that’s set up just as you like it. Ok, there’s no commitment from the weather, but there’s no flights to contend with and you have all the comforts of home, which is particularly attractive for families with young children.
Whatever your interest in purchasing a second home, there is of course a downside; legal fees, maintenance and insurance costs need to be taken into consideration. Plus, depending on how you plan to use your second property you may need to factor in a collection of taxes; council tax, capital gains tax and inheritance tax for starters.
In the greater scheme of things, these are easily dealt with. Most major lenders specialise in second or rental mortgages and many solicitors will happily advise on tax and inheritance planning. For insurance you will need either a specialist second home or landlord policy, designed to cover guests or tenants and often extended periods where the property is unoccupied. For details of these and competitive quotes Highworth Insurance Cover Ltd is a good place to start, call 0844 225 4025 or 01202 937430.