Buying a second home is likely to be the second most expensive item you'll ever purchase, after your primary home. As such a significant investment, it is important to consider the prospective home carefully. Even though a second home is for leisure, there should be nothing leisurely about carrying out such a transaction.
10 Helpful tips
- Don't make an impulse purchase
Because a second home has so much to do with enjoying your free time, it can be easy to get carried away when you see a property you like. But an impulse buy could leave you with a second home which does not suit your needs, or that you cannot realistically afford.
- Think long-term about what you need from the home
Can you reach the property after a few hours' drive from your main residence? If it is to one day serve as a retirement property, you may want to check how close medical services and shops are. Do bus services run nearby?
- Find out about the local area
If possible, visit the area around a potential property during off season as well as high season. In the future you may stay at all times of the year, so it's important to get a taste of what winter might be like – for example. Ask local people about the practicalities of living there. For instance, is the area prone to flooding in winter?
- Get yourself a local estate agent
A reliable estate agent with a long-standing knowledge of the area can give you a real insight into the area. They will also make you aware of other potential properties nearby that matches your requirements.
- Choose a property type that suits your needs
Do you need a large property? Or would a small flat suffice? Will your extended family visit often? Or is it likely to be used by yourself and your partner only? Remember that the bigger a building is, the more money and effort goes into its maintenance.
- Hunt around for a mortgage
With recent incentives such as Help to Buy – along with the behind-the-scenes Funding for Lending –there have been a raft of low-cost mortgages on the market. But as always in the property industry, nothing stays the same for long. However, taking the time to 'shop around' for a mortgage can help you get a funding package that minimises your outgoings long term.
- Take into account other costs
Buying any house is costly, and that's without factoring in services like removals and holiday home insurance. Getting insurance is perhaps especially important since you may not be in the property a great deal. Flooding, fire, vandalism and burglary are some of the possible risks.
- Is fractional ownership an option?
Having examined the possibility of buying a second home, many people are put off by the unexpectedly high costs. Could you make the purchase with friends or relatives who want a place in the same area? Pooling resources can cut your costs hugely, although buying a holiday home with some relatives may defeat the purpose!
- Look into tax benefits
You may get a council tax discount on your second property - usually of between 0% and 50%. Empty or unfurnished homes may get a discount from the council too.
- Consider renting your property out
Renting your property out can mitigate some of the costs involved. While you will be liable for any income you make from renting your second home out, you could benefit from the government's 'rent-a-room' scheme, which lets you make up to £4,250 a year tax free from rental income.
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