14:12 PM, 27th October 2010, About 13 years ago
Low house prices and interest rates have sparked a holiday home boom as investors swoop property at popular tourist locations all over England.
An estimated 245,384 investors now own a second home in England – and the figure’s likely to go up, says a survey by top people’s estate and letting agent Knight Frank.
High gross rental yields typically between 5% and 7% are attractive to investors, especially as these are often higher yields than properties let on shorthold tenancies attain and are much better than keeping cash in the bank.
The statistics also reveal:
“There are several reasons for the faster rebound in demand for second homes following the recent recession,” said Liam Bailey, Knight Frank’s head of residential research.
“Interest rates are much lower than they were in the early 1990s, which has reduced both the cost of acquiring property and the attraction of keeping money in cash. While credit has been severely constrained for homebuyers requiring high loan-tovalue ratios, wealthy investors with large amounts of equity have been able to take advantage of low financing costs.”
The report highlights two holiday properties increasing in popularity –
Sales in these sectors are expected to grow, as the market for traditional cottages remains low because few buyers are putting them on the market.