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Guide to Buying a Second Home in the UK

Buying a second home in the UK can seem like a big step, but our simple guide will help you get started on the basics and inform you of the pros and cons.

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Purchasing a second home in the UK can be both exciting and daunting. Whether for investment, leisure, or a combination of both, it requires careful planning and consideration. Here's a beginner's guide to help you navigate the process:

Why are you buying a second home?

Firstly, understand your reason for the purchase. Is it for holidays, a buy-to-let investment, or perhaps for a family member?

1. Budgeting and Financial Implications

Budgeting for a second home is different from your primary residence. Some things to consider:

  • Mortgage: A mortgage for a second home usually requires a higher deposit, often around 25-40%. Lenders consider second homes riskier. You need to prove that you can cover both mortgages if your primary income is affected.
  • Stamp Duty Land Tax (SDLT): Buying a second property entails an additional 3% on top of the standard SDLT rates. The rates can change, so always refer to the official government site for up-to-date information.
  • Letting Income: If you're planning to rent out your property, you must declare the income. This will be subject to income tax. Use the HMRC’s Property Rental Toolkit for guidance.
  • Capital Gains Tax (CGT): Selling a second home might incur CGT if it has increased in value.

2. Location of the property

The location of your second property is crucial. Research areas for:

  • Rental yield: If you're letting, ensure a good yield and tenant demand.
  • Future growth: Some areas might have potential for future property price growth.
  • Convenience: If it's for leisure, consider its proximity to amenities, transport, and attractions.

Check out some hotspot property areas for 2024 here.

house and construction tools

3. Property Type and Maintenance

Although having a second home can be a blessing, it can also be a curse as it might not be visited frequently! Therefore, low-maintenance properties might be beneficial. Flats or new builds can be easier to maintain than old houses. Consider potential service charges and ground rent, especially with leasehold properties.


4. Legal implications

You must hire a solicitor or conveyancer to handle the legal paperwork. They'll ensure:

  • No legal impediments exist on the property.
  • All necessary searches, like local authority and environmental, are carried out.
  • The sale proceeds smoothly.

5. Property Management

If you're buying-to-let:

  • Letting agents: They can manage the property, find tenants, and handle maintenance. They charge a fee but can ease the burden of direct management. Sites like Zoopla or Rightmove can provide agent listings.
  • Furnishing: Depending on your target market, furnishing might be required. Ensure it is durable to withstand wear and tear.

6. Regular Visits and Security

For second homes not consistently occupied:

  • Consider installing a security system. Visit periodically to ensure everything's in order.
  • For winter, drain the pipes or leave the heating on a low setting to prevent frozen pipes.

neighbours eating round table at street party

7. Local Community

Engaging with the local community can be beneficial:

  • Neighbours can keep an eye on your property.
  • Understand local regulations, especially if your property is in a neighbourhood with a residents' association. Or you could even start one yourself! Have a look on setting up a residents association.

8. Potential Pitfalls

Beware of:

  • Leasehold properties: Ensure you're aware of the remaining years on the lease. Short leases can be problematic. Always scrutinise the service charges.
  • Flood risk areas: Check the Environment Agency’s flood risk map before buying.

9. Future Considerations

  • Reselling: Will the property be easy to sell in the future?
  • Changing circumstances: As with any investment, ensure flexibility. Your circumstances might change, necessitating a sale or a switch from leisure use to letting or vice versa.


Insurance on a second home

Having adequate second home insurance is paramount. Insuring a second property can be more complex compared to insuring your main residence. This is especially true if you intend to rent it out or leave it vacant at times.

1. Buildings and Contents Insurance:

  • Vacancy Clauses: Many standard policies won’t cover homes left unoccupied for 30-60 days. If your second home will be empty for extended periods, you might need specialist unoccupied property insurance.
  • Letting Considerations: If you’re letting out your property, standard home insurance won’t suffice. You need landlord or buy-to-let insurance, which will cover damage by tenants and potential legal costs.

2. Public Liability Insurance:

If you're renting out your property, public liability insurance is crucial. It covers you if a tenant or visitor injures themselves in your property and claims against you.

3. Rent Guarantee Insurance:

Landlords can get insurance to cover lost rent if tenants don't pay. It lasts until the tenant leaves or for a set time.

4. Home Emergency Cover:

This is useful for second homes or rental properties. This is helpful for second homes or rental properties. It ensures that repairs can be promptly addressed during emergencies, like heating failures or major leaks. You won't have to be there in person to deal with the issues.

5. Specialist Cover:

  • Holiday Homes: If your second property is a holiday home, you might require a tailored policy. It would cover scenarios specific to holiday lets, such as damage by short-term tenants or periods when it might be unoccupied between bookings.
  • Listed Buildings: If your second home is a listed building or has unique architecture, standard insurance might not cover it. Specialist policies will take into account the specific materials and craftsmanship needed for repairs.

6. Factors Influencing Premiums:

  • Location: Properties in flood-prone areas or neighbourhoods with high crime rates may have higher premiums.
  • Security: Enhanced security measures can reduce premiums. Consider alarms, security lighting, and approved locks.
  • Excess: Adjusting your excess (the amount you pay in a claim before the insurance starts to pay out) can affect your premiums. However, always ensure the excess is affordable.

7. Discounts and Bundle Deals:

Some insurers offer discounts if you insure multiple properties with them or if you bundle different types of cover, like building, contents, and liability.

8. Periodic Review:

It's crucial to regularly review and update your cover. Property values, rebuilding costs, and contents value can change. Adjust your policy to avoid being underinsured.

When insuring a second home, it's important to know the risks and make sure you have the proper coverage. Always consult with an insurance specialist, read the policy details thoroughly, and make an informed decision. Keep in mind that the cheapest policy may not always be the best option. It's important to choose a comprehensive policy that provides peace of mind.


Note: This guide is for informational purposes and doesn't substitute for professional advice. Always engage with professionals in property, legal, and financial sectors before making decisions.

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