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| FRIDAY 2ND SEPTEMBER 2005 |
 CLIMATE
CHANGE BOOST FOR UK SECOND HOMES
The UK second homes market is set to grow to an unprecedented
size in the next 10 years, as thousands of Britons favour up-and-coming
UK hotspots over foreign locations.
And climate change is becoming an increasingly significant motivator
to buy in the UK versus overseas, according to a study by Direct Line
Home Insurance in conjunction with The Centre for Future Studies.
The study reveals that by 2015, the number of people buying second homes
in the UK will rise by 24 per cent to 405,000 – 156,000 more second
properties than will be owned overseas.
Currently, Britons own 328,000 homes in the UK and 178,000 properties
abroad according to figures taken from Office of the Deputy Prime Minister
(ODPM) Survey of Housing.
This UK second homes boom will see the total value of second homes owned
in this country climb to £53 billion by 2015.
Future second home hotspots
Cities:
* Areas earmarked for regeneration - Bradford City Centre and East
London - are predicated as future second home hotspots.
* Newcastle, Liverpool and Glasgow are predicted to be popular future locations
for second homeowners as strong economic forecasts mean these cities will become
ideal locations for rural dwellers looking for pied-á-terres close to
their city offices.
* Central London, currently the most common location in Britain for second
homes, will continue to attract second homeowners thanks to robust economic
growth and high employment.
* Birmingham will also be a popular location for second homes, as more and
more parents snap up properties to house their children through university.
Rural/Coastal areas:
* In addition, the report finds climate change is becoming an increasingly
significant motivator to buy in the UK versus overseas, with Exmoor and
the Scottish island of Mull set to make the second home hotspots list
due to increasingly hot summers by 2015.6
* The coastal resort of Southend also makes the hotspots list thanks to its
excellent investment prospects, above average house price inflation and close
commuter proximity to the capital.
UK versus overseas second homes hotspots:
Among the reasons cited as influencing prospective buyers to select
second homes in the UK rather than overseas are:
* Convenient travel (31 per cent)
* Better investment opportunities (21 per cent)Preference for the British culture
and climate (20 per cent)
* No language barrier (12 per cent).
Factors influencing prospective buyers' choice of locations for their
future second homes are:
* The natural beauty of a location (51 per cent
* Friendly locals (26 per cent)
* Proximity to family and friends (23 per cent).
How second homes will be financed
When it comes to funding their second homes:
* Due to increased affluence, a quarter (25 per cent) will use savings.
* One in 10 (12 per cent) will acquire their second home through inheritance.
* A fifth (18 per cent) of prospective buyers will re-mortgage their existing
home.
Drivers of UK second homes market:
A number of key factors are predicted as growth influencers for the
UK second homes market over the next 10 years:
* Britons' rising affluence - UK residents are predicted to be 73 per
cent better off financially over the next 20 years, and many will use
their disposable income to invest in second properties closer to their
place of work.
* The ageing population - a significant increase in the number of people who
fall into the typical second homeowner age group (45 and over) is forecast.
* Gradual climate change - the UK is predicted to experience similar temperatures
to the South of France by 2050 with the first signs of this climate change
already occurring. Coastal areas will become a particularly attractive prospect
as buyers anticipate this warming climate.
Andrew Lowe, head of home insurance at Direct Line, comments: "A
strong economy, warming climate and a regenerated urban landscape are
the key factors set to make Britain more attractive than ever as a second
home location."
"With roughly 328,000 Britons currently owning a second home in
the UK compared to 178,000 who own properties overseas, our report shows
that many thousands of buyers will choose to invest in the UK rather
than overseas in the next decade."
"As this trend continues, second homeowners need to think seriously
about properly insuring their second properties and treating them as
important assets to be protected, as they would their primary residence."
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