Pandemic raises interesting questions over the future of second homes in the UK ..
The number of second homes in the UK has risen by 30% over the last five years, to a record high of 495,000 in 2018/19, up from 382,000 in 2013/14, according to analysis of the latest available MHCLG data by Houst, the UK’s leading flexible lettings service. 451,000 of the 495,000, or 91%, of those second homes are located in England.
Houst says that rising incomes, property’s continued draw as an asset class due to steadily rising house prices, and the shift to more flexible and remote working, are likely to have been the main reasons behind the rise in second home ownership over the period. The rise could also have been driven in part by the reduced value of the pound, making it more cost-effective to purchase property in the UK rather than in Europe, for example, that acts primarily as a holiday home.
Houst also explains that the last decade has seen a boom in the use of technology-driven property lettings companies, such as Airbnb and Booking.com, which have made it more attractive and far easier for second home owners to generate income from second residences.
Tom Jones, Co-Founder & Chief Commercial Officer of Houst, says: “The likes of Airbnb and other platforms have revolutionised second home ownership and have certainly been one of the main driving forces behind second home ownership. Owners are now able to generate income from their second home extremely easily, almost all year round.”
“One of the things, however, that second home owners still struggle with is the administration behind second homes. With staycations on the rise – even pre-pandemic – it’s almost like a second full-time job. Owners are constantly checking emails and enquiries from all the different platforms, ensuring the property is clean and ready for renters, and always looking ahead for opportunities to let out their properties.”
Pandemic uncertainty could spell change for second home ownership
Houst says that the Coronavirus pandemic, the time period of which the latest data from the MHCLG does not cover, presents some interesting questions for the future of second home ownership in the UK.
On one hand, many people have seen reduced incomes and job opportunities, which could have triggered some to sell their second properties to boost cash reserves. Additionally, wealthier, older members of the workforce have opted to take early retirement and move into second homes in the countryside, choosing to sell – rather than rent out – their primary residences often close to larger cities and business hubs.
On the other hand, businesses have been forced into adopting work-from-home procedures, which may have encouraged some to move into their second homes, often in the countryside, to see the disruption through. Houst says that the last 12 months, and many business’ commitment to part or even full-time remote working in the future, could have convinced some to invest in second homes, retaining often more city-based properties for use only when they are required to attend the office.
Tom Jones continues: “The restrictions on travel over the past year will have seen many second home owners debate the next steps for their second homes. Those that decide to continue letting properties – rather than selling or moving into them on a more permanent basis – will need to ensure they’re squeezing every pound out of their property.”