residentialsales
massive glut of forced sellers. There have
been a few.” He has 30 per cent less stock
on the books than a couple of years ago –
which could become a real problem if the
market takes off.
On the other hand, it’s possible some
potential sellers are not happy with the
prices they could achieve for their homes,
and are waiting to see if the market will
turn. In any sustained upturn, they may
decide it’s time to put the house on the
It’s very largely a cash
market – so that supply will be freed up.
One cloud on the horizon is the change
market, anywhere
made in the budget to the taxation of
furnished holiday lettings. Karen Clark,
from £200,000 up to
personal tax partner at Baker Tilly, explains
a million – there are
the changes. “With buy-to-let, if you made
a loss, all you could do was carry that loss people with that sort
forward against profits on rental income.
You couldn’t set it against your other
of money.’
income. But with furnished holiday
TIM HAYWARD, JAckson-sTops AnD sTAff
lettings, you could.”
There were various conditions: the
property had to be in the UK, available for property owners pay. Karen Clark points
letting for over 140 days a year and actually out that now the UK has reduced the rate
let for 70, with a maximum of 31 days per of Capital Gains Tax to 18 per cent, the
person. But once these were met, the tax regime is more favourable than that in
break could be claimed; so could Capital Spain (which charges 40 per cent) or
Gains Tax rollover relief, which only France (unless the property is held for
applies to business assets such as holiday 10 years or more).
lets and not to residential properties. She believes the impact on the second
£1,000,000
However, she says, “Investing in holiday homes market will be limited. “I spoke to
property is still worthwhile. You’ll still get a couple of my clients who have furnished
Christchurch, Dorset
relief if you make a loss one year and a holiday lets, and they said that’s not the
profit the next, though if you never cover main reason they bought the property.
Winkworth offer a ‘spacious modern your costs it won’t be much help.” Owners In comparison with some of the other
style home in a prime waterside location of more than one property can also set changes made in the Budget, this is not a
with spectacular views over Christchurch losses from one against profits from others, huge one; it’s a storm in a teacup.”
Harbour. Cool property at a cool but not against other businesses or income. In fact Tim Winney points out that if
£1,000,000. Of course income tax is not the only tax you look at the underlying business, rather
than the tax breaks, the returns on holiday
demand is here across the board.” lettings have improved. More people are
And who is selling? This is the problem. holidaying in the UK, as exchange rates in
There appear to be very few forced sellers, Europe are unfavourable. “People are now
and even where second homes have been earning in a week what they used to get in
bought with relatively high mortgages, a month,” he says; a two bedroom
low interest rates have helped weather the bungalow worth £250,000 can achieve a
storm, according to Tim Winney. That yield of eight or nine per cent.
leaves the second homes market One might even speculate that the high
desperately short of stock. profile cases of British buyers seeing their
Lucian Cook says, “The whole lack of Spanish flats bulldozed, or their Bulgarian
stock is a real issue, a big issue across the ski chalets plunging in value, may make
market.” Stock levels have eroded steadily
£2,300,000
some of those quarter of a million owners
since mid 2008; every office I spoke to of second homes abroad wonder if they
admitted that it was a problem sourcing
Brancaster Staithe, Norfolk
would be better off with a second property
properties, though a national network in the UK. If they’re repatriating funds
can help with deal flow. Jackson-Stops have a ‘unique sea side from the Eurozone, they’ll do well on the
William Morrison says, “There’s a bit of property located next to the marsh with exchange rate, too.
frustration among buyers now owing to views over Brancaster harbour to Scolt
lack of stock. The sellers are the same as Head and the National Trust Nature
Any views on the second home market?
they’ve always been; there hasn’t been a Reserve’ at £2,300,000
www.propertydrum.com/articles/2ndhome
36 JULY-AUGUST 2009 PrOPertYdrum
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