Recent data has revealed a significant rise in the number of second homes across England. According to the information provided by Dataloft by PriceHubble and the 2022/23 English Housing Survey, the number of households owning second properties has surged by 1 million, reaching an impressive 4.3 million from the previous year’s 3.3 million. This upward trend presents intriguing opportunities and considerations for both property investors and potential buyers. With many of these properties being rented out, the landscape of the property market is evolving rapidly. Let’s delve deeper into this remarkable increase and examine the driving forces behind this shift.
The Rise of Second Homes in England
The 2022/23 English Housing Survey, as analysed by Dataloft in partnership with PriceHubble, offers a comprehensive look into the of the property market in England. According to the survey, the number of second homes has grown dramatically in just one year, with ownership figures now standing at 4.3 million. This substantial increase of 1 million second homes underscores the continuing allure of property ownership, whether for personal use or investment purposes.
This growth can largely be attributed to the rise of buy-to-let investments, where second homes are primarily purchased with the intention of renting them out. These homes account for a staggering 73% of all second properties, illustrating the strong demand for rental opportunities across the country.
The Dominance of Rental Properties
The most significant driving force behind the increase in second homes is the rental market. With rental properties making up the majority (73%) of second homes, this indicates a notable trend: many property owners are now investing in additional properties as income-generating assets. This strategy has been especially lucrative in recent years, thanks in part to rising demand for rental properties in both urban and rural areas.
This surge in rental properties aligns with the growth of the private rental sector, which has expanded steadily over the past decade. Property owners, both large-scale investors and smaller buy-to-let landlords, have taken advantage of high tenant demand, making property investment a popular choice for those seeking a more reliable return on investment compared to other forms of saving or investing.
In addition to traditional long-term rentals, the popularity of holiday lets and short-term rental platforms such as Airbnb has also contributed to this increase. For many property owners, a second home presents a dual opportunity: a place for personal retreat and a way to generate additional income during periods when the property is unoccupied.
Exclusive Second Homes
While rental properties dominate the landscape, exclusive second homes still form a substantial portion of the market. These homes, which are not rented out and are used solely by their owners, account for 22% of second properties. Although their share of the market has decreased slightly compared to the previous year, the absolute number of exclusive second homes has still increased by 150,000, bringing the total to 946,000.
The vast majority of these exclusive second homes, 114,000, are located within the UK, with many owners choosing properties in desirable rural or coastal areas as holiday homes or weekend getaways. This trend reflects the continuing appeal of owning a second property for personal use, offering homeowners a valuable space to escape the hustle and bustle of daily life without the need to leave the country.
A Shift in Usage
While the number of second homes has increased overall, the survey highlights a small but notable decline in properties used for student accommodation or those held in a state of transition (e.g., awaiting sale or pending occupation). These categories now make up a smaller proportion of second homes compared to previous years, potentially reflecting changing market dynamics.
One possible explanation for the decline in student-related second homes could be the growing popularity of purpose-built student accommodation (PBSA), which has become a dominant force in university towns and cities across the UK. These developments offer students modern, well-equipped housing solutions, reducing the need for parents or investors to purchase second homes specifically for student use.
Similarly, the drop in transitional properties may indicate a more stable housing market, where homeowners are less likely to keep properties empty for extended periods while waiting for a sale or new occupants. This suggests that second homes are increasingly seen as active, income-generating assets rather than passive holdings.
The Appeal of Second Home Ownership
The steady rise in second home ownership, particularly for rental purposes, demonstrates the enduring appeal of property as an investment vehicle. For many investors, owning a second property offers a blend of potential capital appreciation and steady rental income, making it a popular choice in an uncertain economic climate.
In addition, the variety of options available to potential buyers – from city flats to rural cottages – means that second home ownership is accessible to a wide range of buyers, each with different goals in mind. Whether used as a holiday home, rented out as a long-term investment or held as part of a diversified property portfolio, second homes continue to play a significant role in the English housing market.
What Does the Future Hold?
The increase of 1 million second homes in just one year is a clear indication that the property market in England remains robust and attractive to investors. With rental properties making up the majority of these homes, the trend suggests that many buyers view the property as a long-term, income-generating investment.
For those considering investing in a second property, now could be an opportune moment to take advantage of the rising demand for rental homes and the potential for property value appreciation. Whether you’re looking to rent out a property, create a personal retreat or diversify your portfolio, the growing second home market offers numerous opportunities.
At Northwood, we understand the complexities and opportunities of the property market. If you’re considering purchasing a second home, either as an investment or for personal use, our team of expert estate agents can guide you through the process. Contact us today to explore your options and make the most of this thriving market.
