A positive sign for the UK housing market comes in the form of data showing the amount of second homes in England has risen. The number of second homes in England rose by 2.6% in 2009 following a contraction in 2008 of -0.4%. This rise, which equated to 6,212 additional second homes, pushed the total to an all-time record of 245,384.
Liam Bailey, head of residential research at Knight Frank, comments: “The number of second homes in England has been steadily rising over recent years. The recession and credit crunch saw this trend falter in 2008 – when the total fell by 912 (or 0.4%). The recovery in 2009 – with an additional 6,212 English second-homes, marked a return to long term growth.
“Our experience points to four clear reasons for the upturn in demand for second homes:
1.) Confidence – renewed economic and consumer confidence in early 2009 encouraged more affluent buyers to reconsider purchases they had put on hold in 2008.
2.) Finance costs – very low interest rates encouraged demand from wealthy buyers
3.) Currency change – a weaker pound made house purchases in the Eurozone more expensive and encouraged buyers to look at second homes in the UK
4.) Investment alternatives – very weak returns on cash investments and nervousness over equity market volatility drove investors to consider property investment options again
“Wider social trends have been pushing the demand for UK based second homes over recent years. There is a perception of a “green” credential that attaches itself to holidays in the UK, in addition, the “localism” trend, popularised by programmes like River Cottage has also encouraged an exploration of more local holiday options. In 2009 these trends combined with the “staycation” mood to drive demand.
“The demand for UK second homes supported the surprise success story of the house-building market in 2009, when new-build second home investments saw very strong demand – especially in markets like Newquay in Cornwall.
“Looking forward to 2010 our view is that growth in demand ought to continue – but the potential growth in second home numbers will be determined by the supply of properties for sale – early indications this year suggest that supply in the main second-home hotspots is still 20% below the long-term average.”
Key second homes stats at a glance…
Year Total second homes Annual change (Nos.) Annual % change
(England)
2005 229,186 NA NA
2006 236,331 7,145 3.1%
2007 240,084 3,753 1.6%
2008 239,172 -912 -0.4%
2009 245,384 6,212 2.6%
Source: Knight Frank Residential Research, CLG
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