Everything you need to know about purchasing a second property
Although second home owners are still in the minority, the number of people in the UK who have bought another property has increased dramatically over the past few decades, with over 10% of British adults now owning a second home. There are several reasons why people buy second homes, and if you’re thinking of joining the ranks of second homeowners, you need as much information as possible. If you’re considering buying another property, here is our expert advice.
Why Do People Purchase Second Homes?
Everyone has their own reason for buying multiple properties but the three main reasons why people purchase second homes are:
- As an investment. The private rental sector represents a great investment opportunity for prospective landlords, so it isn’t too surprising that one of the main reasons for buying another property is as an extra form of revenue.
- As a holiday property. Whether in the UK or abroad, buying holiday homes is becoming increasingly popular.
- For somebody else. Buying a property for a family member, typically a child, may be a less popular reason to purchase a second home, but it happens fairly often.
How Can I Buy Another Property?
There are several ways in which you can buy another property including securing a second mortgage, buying with cash, or using the equity you have in your existing home.
Although some people believe that homeowners must pay off their mortgage before they obtain another, this isn’t actually the case. It’s possible to have two concurrently-running mortgages. You will, however, have to be able to show you’re able to afford a second mortgage, have an excellent credit rating, and have a large deposit available.
If your existing property already has plenty of equity, it’s possible to release it by remortgaging and then using the money to cover some or all of your new purchase.
Which Other Costs Should I Consider When Purchasing A Second Home?
As well as the cost of buying a second home, there are some extra costs to bear in mind. The most significant is the stamp duty levied on second properties, which at present stands at 3% of the purchase price. There is also Capital Gains Tax to pay when selling a second home, although that may not be too much of a concern depending on when, or if, you’re planning on selling up. Don’t forget, too, that council tax must be paid on second homes, although if you’re planning on renting out the property, the tenants can take over responsibility for making the payments.
Where Can I Get More Advice About Buying Second Homes?
If you’re considering purchasing a second home, the experienced team at Lyss Homes is on hand to give you all the advice and information you need. We can help you find your perfect second home, so give us a call on 02080505452 or send an email to info@lysshomes.co.uk. We’re looking forward to hearing from you.
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