25 November 2015

Buying a holiday home

Buying a second home is a dream for many, but it’s also a major financial commitment. We’ll walk you through some essential points to consider before you start your property search.

Choosing a location

Some people may already have the perfect holiday home in mind. But if you’re still searching for a good fit, start by considering how you want to use your holiday home.

If you’re only looking for a place to spend weekends, Cornwall may be more realistic than sunny Spain. But even if you’re planning to spend a large part of the year in your second home, keep in mind that you’ll need to consider travel costs.

In addition, if you’re planning to use your holiday home year-round, it might be a good idea to pay a visit to your chosen destination in all seasons. At the very least, talking to other holiday homeowners about life in the off seasons can help you avoid a costly mistake.

Setting your budget

A holiday home can be a great source of enjoyment, but there are a number of costs involved:

  • Furnishings

    You’ll need to fit your new home with a full set of furniture, kitchen and potentially garden supplies.

  • Insurance

    Holiday home insurance often costs more than the insurance on your main home, since there is a greater security risk when a house is unoccupied for part of the year.

  • Travel costs

    If you need to buy an additional car for your new holiday home, you’ll need to factor that into your budget as well.

  • Taxation

    There could be a range of tax implications including council tax and capital gains tax that you will need to pay on your second home.

You could plan to rent out one of your homes for part of the year to cover costs. But keep in mind that there is a lot of competition in the holiday rental market, and finding suitable tenants may be a bigger challenge than you expect.

Financing your holiday home

You may need to fund your new purchase by taking out a new mortgage. There’s a lot to consider here, so it’s a good idea to have your mortgage provider or an independent financial advisor look at your specific circumstances and talk you through the pros and cons of each option.

You can take a look at our range of mortgages

Things to look for in a property

Once you’ve picked a location, decided on an affordable budget and have a good idea of your financing plan, you can start searching for the perfect property.

For many buyers, location, atmosphere and access to good restaurants and leisure facilities are key.

With holiday homes in particular, you’ll want to consider security. A second home will often spend long stretches of time unoccupied, which can attract thieves. Choosing a property in a neighbourhood of year-round residents is one way to reduce your risk, since there is someone around to keep an eye out for trouble.

The garden is another point to consider. If you won’t be around every week in spring or summer, an untended garden could upset neighbours. You can hire gardeners to handle regular upkeep, but a property with low maintenance landscaping or a paved courtyard might be the better choice.

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