One In Eight British Homeowners Are Planning To Buy A Second Property In The Next 10 Years
Whilst undertaking new research into the future investment plans of homeowners, a UK insurance agency has uncovered that as many as two thirds of Britons want to add value to their homes through extensions, conversions or conservatories, whilst almost one in three plan to make overpayments on their mortgage product in order to pay off their loan before their agreed term length ends.
As part of the study, the team at www.coverbuilder.co.uk polled 2,784 UK adults aged 25 and over, who'd all purchased a property within the last 10 years, in order to understand Britons financial plans for the future with regards to homeownership. All those taking part were from an even split of each of the UK regions.
When respondents were initially asked to state roughly how much longer they had left on their mortgage terms, the average length of time emerged as 14 years.
All homeowners were then given a list of potential options relating to their property and asked to reveal which, if any, they'd considered doing themselves during the next 10 years. The results emerged as follows:
1. I plan to add extra rooms to my property (e.g. extensions/loft conversions/
2. I plan to remodel rooms in my house – 47%
3. I plan to take in lodgers/tenants to rent out spare rooms in my property – 32%
4. I plan to make overpayments on my mortgage in order to pay off my loan before the agreed term length ends – 28%
5. I plan to save up and purchase a second 'buy-to-let' property – 13%
Next, those that stated that they were planning on owning a second property within the next decade were asked if they'd begun to fully research the costs associated with doing so, such as the stamp duty surcharge and the issues surrounding periods of unoccupancy. The majority of these individuals (71%) confessed to researchers that they'd not yet begun to look into the implications and potential drawbacks of owning a second property, but that they planned on doing so within the next year.
In order to uncover the areas of the UK with homeowners most likely to want to invest in a second property within the next 10 years, researchers analysed answers to reveal the geographical breakdown of participants, with the number of those looking to purchase another home as follows:
• South East – 16% (of those looking to purchase a second property lived here)
• South West – 15%
• Scotland – 12%
• North East – 10%
• London – 9%
• West Midlands – 8%
• East of England -6%
• East Midlands – 6%
• North West – 5%
• Northern Ireland – 4%
• Wales – 4%
• Yorkshire and Humberside – 3%
Finally, the 87% of homeowners not planning to purchase a buy-to-let property in the future were asked if it was something they'd previously considered, with more than one fifth (21%) admitting they'd "considered it in the past but decided it was no longer something I wanted to pursue." When asked to reveal why they'd come to this conclusion, "increasingly strict regulations and legal requirements for buy-to-let owners" (64%), "the hassle of on-going maintenance work on the property" (27%) and "the financial risks of not finding suitable tenants" (12%) emerged as the most common reasons Britons had been put off.
Rob Rushton, Head of CoverBuilder, https://www.coverbuilder.co.uk says:
"To purchase a buy-to-let or not to purchase a buy-to-let, that is the question. In theory there are many benefits to owning a second property, but unless you are fully prepared for the reality of the additional financial costs, legal requirements and have a sufficient amount of funds to fall back on, then it might not be the best financial investment for you.
"In 2015, there were an estimated 700,000 empty properties in the UK, so there is also the potential risk of purchasing a home that ultimately won't have an immediate tenant. This, combined with increasing regulations and rules surrounding a second property will have Britons questioning whether they are truly prepared for both the financial and administrative commitment."