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Cheap mortgages a must for second homes

Date: Mon, 22 Aug 2005

Cheap mortgages are helping investors fund the buying of a holiday homes.

The UK property market is seeing an increase in the number of people purchasing a second home, with around 500,000 households owning a second property, with half of these families using the properties as weekend or holiday retreats.

However, the growing number of second property mortgage deals means that some first-time buyers are being squeezed out of the housing market as prices in holiday destinations continue to rise. Standard Life is already estimating that changes to pension investment legislation could see an extra £10 billion invested in the second home market.

Liberal Democrat MP Julia Goldsworthy is calling for the introduction of legislation that would force sellers of properties to holiday home buyers to seek "planning permission" for the deal.

Ms Goldsworthy, MP for Falmouth and Camborne believes that allowing local authorities the right to intervene could ensure that local residents are not priced out of the market by second home buyers.

"We think the problem of second homes can be partially tackled by giving local government more authority; more authority to set business rates rather than council tax and also to give them the powers so that to change a full-time home to a second-home will require planning permission," added Ms Goldsworthy.

However, critics have claimed any such system could result in an over complicated housing market and lead to negative equity for some homeowners.


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