UK second homes to soar 24 per cent by 2015

Second homes market to grow to £53 billion in the next decade

The UK second homes market is set to grow to an unprecedented size in the next 10 years, as thousands of Britons favour up-and-coming UK hotspots over foreign locations. 

A new study from Direct Line Home Insurance in conjunction with The Centre for Future Studies reveals that by 2015, the number of people buying second homes in the UK will rise by 24 per cent to 405,000 – 156,000 more second properties than will be owned overseas.1  

Currently, Britons own 328,000 homes in the UK and 178,000 properties abroad.2

This UK second homes boom will see the total value of second homes owned in this country climb to £53 billion by 2015.3

Future Second Home Hotspots

Cities

· Areas earmarked for regeneration - Bradford City Centre and East London4 - are predicated as future second home hotspots
 
· Newcastle, Liverpool and Glasgow are predicted to be popular future locations for second homeowners as strong economic forecasts mean these cities will become ideal locations for rural dwellers looking for pied-á-terres5 close to their city offices
 
· Central London, currently the most common location in Britain for second homes, will continue to attract second homeowners thanks to robust economic growth and high employment 
 
· Birmingham will also be a popular location for second homes, as more and more parents snap up properties to house their children through university.
 
  Rural/Coastal Areas
 
· In addition, the Direct Line Second Homes in the UK Report finds climate change is becoming an increasingly significant motivator to buy in the UK versus overseas, with Exmoor and the Scottish island of Mull set to make the second home hotspots list due to increasingly hot summers by 2015.6
 
· The coastal resort of Southend also makes the hotspots list thanks to its excellent investment prospects, above average house price inflation and close commuter proximity to the capital.

UK versus Overseas Second Homes Hotspots

 Among the reasons cited as influencing prospective buyers to select second homes in the UK rather than overseas are:
· Convenient travel (31 per cent)
· Better investment opportunities (21 per cent)
· Preference for the British culture and climate (20 per cent)
· No language barrier (12 per cent).
 
 Factors influencing prospective buyers’ choice of locations for their future second homes are:
· The natural beauty of a location (51 per cent)
· Friendly locals (26 per cent)
· Proximity to family and friends (23 per cent).
 

How Second Homes Will Be Financed 

 When it comes to funding their second homes,
· Due to increased affluence, a quarter (25 per cent) will use savings
· One in 10 (12 per cent) will acquire their second home through inheritance
· A fifth (18 per cent) of prospective buyers will re-mortgage their existing home.
 

Drivers of UK Second Homes Market

Andrew Lowe, Head of Home Insurance, Direct Line, comments:

“A strong economy, warming climate and a regenerated urban landscape are the key factors set to make Britain more attractive than ever as a second home location.

“With roughly 328,000 Britons currently owning a second home in the UK compared to 178,000 who own properties overseas, our report shows that many thousands of buyers will choose to invest in the UK rather than overseas in the next decade.

“As this trend continues, second homeowners need to think seriously about properly insuring their second properties and treating them as important assets to be protected, as they would their primary residence.”

For a full copy of the Direct Line Second Homes In The UK Report visit www.directline.com 

-ends-

For further information:

Notes to editor

1. 2. There are currently 328,000 second homeowners in the UK, which will rise to 405,000 by 2015. In 2003/4, UK residents owned 178.000 properties in foreign countries and it is predicted that by 2015, 249,000 overseas second homes will be owned by UK residents - Direct Line Report: Second Homes in the UK, August 2005 – forecasts based on figures taken from Office of the Deputy Prime Minister (ODPM) Survey of Housing, 2002/3, 2003/4 and 2004/5
3. The UK second homes market is set to grow from an estimated £38.7 billion today to £53 billion in 2015. Direct Line Report: Second Homes in the UK, August 2005 – forecast based on information from Council of Mortgage Lenders Housing Report 2004
4. 5. The Direct Line Second Homes in the UK Report, August 2005: Sources include DTi White Paper on Globalisation and the UK, property trends published by the ODPM, Visit Britain, Visit Scotland and the Welsh Tourist Board.     

UK Second Homes Hotspots in 2015

Direct Line Insurance plc, authorised and regulated by the Financial Services Authority.  Calls may be recorded.  Conditions apply.