Capital sees second homes growth

08 March 2004
The capital has now become the biggest growth area in second home ownership, after it saw a 16 per cent rise in the City and 13 per cent growth in Tower Hamlets, which includes the Docklands area, according to research conducted by FPD Savills.

The estate agent conducted the first detailed survey of the sector and found that the second homes market has doubled in value over the past six years and now consists of 206,000 properties, worth an estimated £40 billion.

Other hotspots outside the capital include the East Anglian coast, Cornwall, the Isles of Scilly, South Lakeland and the Berwick upon Tweed district, The Guardian reports. The survey also showed that the market is spreading to new areas such as Lincolnshire.

The boom in second homes has been partly blamed for pricing homebuyers out of the property market in rural areas.

Richard Donnell, head of residential research at FPD Savills, predicted: "There still remain many areas of Leicestershire, Derbyshire and Northamptonshire, within two hours drive of London, that remain largely undiscovered and which are likely to attract those who cannot afford the increasingly expensive south west or Suffolk coasts."

The prospect of councils being able to end the 50 per cent council tax discount on second homes from next month and charge up to 90 per cent does not appear to be deterring buyers.

The Countryside Agency claims there is a growing housing crisis in the shires, where people have to spend 57 per cent of their income on housing, compared to 32 per cent in towns.