Wednesday, August 18, 2010
Staycations = higher holiday home prices?
The number of second homes in Britain rose 2.6% to reach a record level of 245,384 in 2009, due to low returns on traditional investments and a growing trend for holidaying at home, research has shown. According to estate agent Knight Frank, there could be a further 2% rise in the number of people who own a new-build second property by the end of this year. Good quality holiday lets typically offer between 5% and 7% of gross rental yields a year, often higher than the returns on a buy-to-let property, prompting buyers to look up on second homes as an investment rather than a luxury. Record low interest rates have reduced the cost of buying a holiday property, enabling wealthy investors with large amounts of equity to take advantage of low financing costs.