The true cost of a second home
Many people dream of owning a second home. It represents an always-open window of opportunity, a chance to get away from it all and relax in one of your favourite parts of the world.
There are around 250,000 second homes in Britain, and countless more on foreign shores. In popular coastal areas of the British Isles, estate agents claim that up to three quarters of their customers are people wanting to buy holiday homes. Unsurprising then, considering the law of supply and demand, that second home prices have rocketed in recent times. Escapism, it seems, comes at a premium.
But it’s not just the bricks and mortar you have to pay for - there are a number of other financial factors that need to be taken into account. If you are thinking of snapping up a second property, here are a few things you may want to consider:
Council tax
Until recently, the council tax system dictated that homeowners must only pay half the usual rate on a house which is not used as the main residence. However, in parts of the country where the concentration of second homes is high, and affordable housing for locals is thin on the ground, this reduction in tax has been lowered to as little as 10%.
It’s an important step to ensure the conservation of some of Britain’s oldest village communities, but it does mean that you could end up paying nearly as much tax on your second property as you do on your first.
Gardening / maintenance
When you visit your second residence, you probably won’t want to spend your whole time digging up weeds or re-painting the fence.
But if you want to put your feet up when you arrive, you’ll need to pay for a gardener to keep things in order while you are away. Similarly, odd jobs in and around the property will require taking care of, especially if you plan to rent the property out . All these costs add up.
Furniture
It sounds obvious, but before taking the plunge into second-home ownership, consider just how much it will cost to get another property fully furnished to your liking.
You’ll need to bear the cost of the curtains, carpets, beds , tables, chairs, television, fridge, cooker – pretty much everything but the kitchen sink (that's assuming a sink is already in place).
Don’t forget to add in the cost of cookware, tableware and cutlery too, as well as homely touches like cushions, rugs and wall decoration.
It’s important to weigh up these extra costs before making a decision on a house. A weekend retreat may not be quite so appealing if you have to sleep on a cold floor and eat off paper plates.
Second car?
If you are buying a property that’s hundreds of miles from home, you may prefer to travel there by plane, train or boat rather than face a long and stressful drive. If so, think about how you’ll travel once you are there.
If public transport is insufficient, a second car may be the only option.
Be warned that in addition to the initial outlay, an infrequently-run car may incur higher maintenance costs than you expect. What’s more, you’ll need to add ‘garage’ to your second home wish list.
Utilities
Gas, electricity and water bills won’t just kick in when you’re in residence, you’ll be paying standing charges each and every quarter.
Similarly, if you establish a telephone connection in your new house, you’ll be paying line rental on a monthly basiswhether you’ve made a call or not - and a television that hasn’t been switched on for two months still requires a television licence.
Useful sites
http://www.thisismoney.co.uk - Mortgage and home advice
http://www.rightmove.co.uk - UK's number one property site
http://www.primelocation.com - Property investment articles
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