The number of second homes in the UK is expected to increase to more than 250,000 this year as holidaying in the UK grows in popularity.
Research from Knight Frank, the property agent, showed that the number of second homes rose by 2.6 per cent in 2009, following a slight decline of 0.4 per cent in 2008. It forecast a further 2 per cent rise this year, taking the total number of UK second homes above a quarter of a million.
This comes as a report from Halifax found that Bexhill-on-Sea in East Sussex affords the highest quality of life of all of the UK’s seaside towns, followed by Burnham-on-Crouch in Essex and Christchurch in Dorset.
Liam Bailey of Knight Frank said increased demand for self-catering accommodation throughout the year has enabled buyers to look on a second home as an investment rather than a luxury.
He pointed out that good-quality holiday lets now offer gross rental yields of between 5 and 7 per cent.
Owners of holiday homes who rent out their property can also take advantage of tax breaks under the special rule on furnished holiday lettings. Thousands of second- homeowners can offset losses against other income, such as salary.
However, new rules outlined by the Treasury last month will see this tax break restricted from next April so that owners will only be able to offset trading losses against income from the same business. In addition, the number of days a year on which a property must be available and let to qualify for the tax break is to be increased to 210 and 105 respectively.