The pandemic-induced lifestyle shift combined with a stamp duty holiday has sparked a boom in demand for second homes. Around 20,000 second homes were bought in Great Britain last year. While buyers looking for a city-based pied a terre or perhaps a bolt hole further afield only made up 2% of all sales agreed in 2020, the annual figure masks a rise in demand since the introduction of the stamp duty holiday.
Half of the second home sales last year were agreed in the four months following the introduction of the stamp duty holiday in July. In January alone, there were 58% more sales agreed to a second home buyer than during the same month last year. But if they fail to complete before the end of the holiday, their stamp duty bill will rise by £3,000 on average.
Since March there has been a consolidation of favoured second home locations. Pre-pandemic hot-spots have got hotter, while ‘warm-spots’ have cooled. The 10 Local Authorities recording the highest share of second-home purchases in 2020 have all increased their share from 2019. This has been driven by a shift from urban to rural, underpinned by Londoners accounting for a larger proportion of second home purchasers outside the capital.
The renowned seaside resort of Scarborough tops the list. Here 41% of homes were bought by a second home buyer last year, costing £280,000 on average. Great Yarmouth, another popular seaside town in the East of England comes second on the list, with one in three homes bought by a second home buyer in 2020. Unsurprisingly, the classic boltholes in Cornwall, Devon and Norfolk rank highly too.
With staycations high on the agenda for the foreseeable future, the option to receive a regular rental income is also an attractive perk. And with working from home more often likely to become the norm for some workers, this trend could be here to stay.