Do you aspire to purchase a second home?
According to the English Housing Survey, 2.1 million households reported having at least one additional property, and the trend is not slowing.
At Myerson, we recognise the difference between purchasing a primary residence and an additional property. We aim to deliver clear, concise and tailored legal advice depending on your circumstances.
Our Residential Property Solcitors outline everything you need to consider before buying a second home.
What is a second home?
In short, a second home is a property you own in addition to your main residence.
The meaning of a ‘second home’ can be widely interpreted depending on your circumstances.
We can assist you whether you wish to purchase a rural retreat or buy to let property.
Common reasons for buying a second home
Holiday Home
Are you looking to purchase a house by the sea or a rural escape? If your dream property is in England or Wales, we can help you. Geography does not confine us.
Investment
Alternatively, you may wish to purchase a second home as an investment. By renting it out to a tenant, you can earn passive income.
What to consider when buying a second home
Do not let your heart rule your head.
Before you purchase your second home, you should take note of the following legal considerations:
Restrictive covenants
If you intend to purchase an apartment, check the lease carefully, as it may contain restrictions on subletting, possession or sharing occupation. This would be problematic if you intend to use the property as a holiday let.
Some locations in popular holiday destinations, for example, Cornwall or the Lake District, impose specific restrictive covenants on purchasers to ensure that the local population can buy residential homes and not every property may be a holiday let.
Your Local Authority’s proposals
Reviewing your local search carefully before exchange and completion is prudent.
This will reveal matters affecting your property, such as compulsory purchase orders, planning permissions, building regulation consents, enforcement notices, and tree preservation orders.
You must be mindful of how these entries may hinder your future use or plans for the property.
For example, on 20 October 2024, The Lake District National Park Authority refused a planning application to convert Devonshire House in Ambleside into four-holiday apartments and a flat.
Tax implications
Obtaining independent tax advice before purchasing a second home is wise.
Following completion, we would file your stamp duty land tax return and pay the duty. Purchasing a second property attracts a 5% surcharge above the standard rates.
Likewise, your second home would be liable to capital gains tax when you come to sell it. Following completion, you must report your liability and file your return.
Additional expenditure
You must be mindful that it will be expensive to run two households. Whether you wish to use your second property as a holiday let or as a buy-to-let, you would be liable to pay ‘second home council tax’ and to meet the cost of any unexpected repairs and maintenance.
In addition, landlords of tenanted properties have enhanced responsibilities, such as boiler, gas and electric tests.
Mortgage Finance
Whether you are proposing to purchase your second home using a buy-to-let or holiday-let mortgage, you would need to comply with your lender’s requirements and special conditions before the transaction can proceed.
Contact Our Residential Property Solicitors
Whatever your ‘second home’ looks like, we can assist you.
Whether you want to rent it out or create a ‘home away from home’, we will tailor our legal advice to suit your circumstances.
Leave the legal practicalities to our Residential Property team.
Contact us on:
01619414000
Laura Higgins
Associate
Laura is an Associate in our Residential Property team. Laura has experience in a wide range of residential property transactions, including freehold and leasehold sales and purchases, Transfers and Assents.
About Laura Higgins