6 ISSUES FOR £6 Subscribe to Surrey Life today click here

Issues relating to second homes or investment properties

PUBLISHED: 16:11 26 June 2017 | UPDATED: 16:11 26 June 2017

Archant

A look at some of the issues arising in relation to second homes or investment properties

One could be forgiven for feeling something of a pariah as a result of owning a second property in the Southern Counties of England. Successive governments have seemingly sought, through their respective taxation policies, to make owning a second home as expensive and thus unattractive as possible.

Additional stamp duty land tax is payable on second homes when purchased, changes to income tax in relation to rental income and mortgage interest payments bite during ownership, and there is no availability of relief from capital gains tax on sale. If that little lot doesn’t put you off, the prospective new neighbours, the locals, have also had a go. 


In the Courts

In November 2016, the High Court heard a case brought by property developers to overturn a neighbourhood plan introduced in St Ives, proposing that newly built homes could only be occupied as principal residences (i.e. by locals or others as their main residence) rendering them unavailable to those looking to buy a second home. The High Court ruled in agreement with the locals, who were complaining that 25% of the town’s residential property were second homes (a 70% increase in a decade up to 2011). In Rock and Polzeath the figure is said to be over 50%.

Other parishes, such as Cawsand, have since followed suit and joined forces with their own similar neighbourhood plans. Even Verbier in Swizerland has introduced a rule requiring the purchasers of chalets to use them as their primary residences. The ever-increasing house prices that result from the huge demand for second homes in certain areas, can render them unaffordable to locals and can have a huge impact on the local community. 


A reluctance from mortgage lenders

The mortgage lenders have also had their say. Whilst most mortgage companies will happily lend against a principal residence they are generally more reticent about lending against a second home. If you plan to occupy the second home from time to time you will almost certainly be in breach of the conditions of a buy-to-let mortgage. Those mortgage companies that will lend, are unlikely to do so on particularly favourable terms, making the acquisition/investment even more difficult, expensive and risky, as your choice of lender is significantly reduced.


A right to buy a second home

As we live in a capitalist society, should we not allow the market to dictate an organic balance of supply versus demand? Is it not the case that the communities most affected by second home syndrome actually benefit greatly from the money generated by the tourist industry and second home owners providing jobs for locals, and trade for the bars, cafés, restaurants and tourist attractions?

The irony is that these geographical areas are so popular because of their raw beauty, and the warm and welcoming communities created by the locals. Unfortunately however, the effect of the volume of second homes or investment property in some areas has sometimes been to gut them of their charm and in the worst cases also their doctors and schools and people as it becomes unaffordable and impractical for locals to live there.


Preserving local communities

We all have a responsibility, as with an endangered species, to have regard for our beautiful rural communities, and seek to buy property sustainably - in a way which allows these communities to thrive for us all to enjoy.

Certain districts and developers have come together to construct purpose-built sites for second home owners to avoid depriving locals of housing stock. Whilst these developments have various limitations on when they can be occupied and by whom, which might affect their attractiveness as an investment proposition or flexible second home, they do at least strive to put a stop to the decline of these communities into seasonal playgrounds.

We can also help you to discharge your responsibility with these three top tips:

• Carefully consider which towns and villages are able to accommodate second home owners whilst retaining a good percentage of local homes and a wide range of amenities.

• Do your upmost to engage with your chosen community as often as possible, bringing your range of skills and time to local projects and events.

• Support local goods and services as much as possible and encourage others (such as your guests or visitors for holiday lets) to buy local supplies and support the community during their stay.

If you do decide to buy a second or investment home, then you will need a good lawyer and preferably one with a human and commercial approach. That’s where we come in.


William Marriott is a property lawyer with Charles Russell Speechlys in our Guildford office. If you would like to speak to him about any aspect of buying or selling a house, email him at william.marriott@crsblaw.com or calf 01483 252 519.

More from Surrey Life

Friday, July 20, 2018

As the closing date for our Readers’ Short Story competition edges nearer, we get some last minute tips from those who know best

Read more
Friday, July 20, 2018

From riverside retreats to secret gardens, we’ve got your summer covered with this selection of Surrey pubs that are perfect to enjoy your favourite tipple and a bite to eat in the sunshine

Read more
Friday, July 20, 2018

Meet Etta Lemon – the dragon of Redhill who founded the RSPB and did battle with the Suffragettes

Read more
Friday, July 20, 2018

We round up 10 of the most beautiful photos of Surrey shared on Instagram this week…

Read more
Thursday, July 19, 2018

We’ve teamed up with the new-look beach-side hotel Gara Rock, opening this summer near Salcombe in South Devon to offer you the chance to win a two-night stay for two

Read more
Thursday, July 19, 2018

This edition of Surrey Life features all the local ingredients to make this month special

Read more
Thursday, July 19, 2018

Have you always wanted to write a novel but struggle to find the motivation? Well now here’s all the incentive you need as we launch our readers’ short story competition in partnership with Guildford Book Festival

Read more
Tuesday, July 17, 2018

One of the biggest foodie events in the Surrey calendar is back for 2018! Voting is open and this year’s event will take place at G Live, Guildford on Thursday 13 September 2018

Read more
Tuesday, July 17, 2018

Whether you're looking for fine dining, pub grub or exotic dishes, eating out in Surrey has something for everyone. Here's our guide to the best local restaurants and pubs

Read more
Tuesday, July 17, 2018

A community-spirited pub with its own microbrewery, The Plough has long been a haven for people venturing into the Surrey Hills. Matthew Williams visits

Read more
Tuesday, July 17, 2018

Previously the private chef to the Mauritian president, Jean-Didier Gouges became head chef at The Petersham Restaurant in Richmond’s Petersham Hotel in October

Read more
Monday, July 16, 2018

As the Runnymede Rivers Celebration got under way, Rebecca Younger visited a hotel right at the heart of the action

Read more
Monday, July 16, 2018

Great things to do in Surrey this weekend: art exhibitions, walks, concerts, theatre, places to visit and other events and ideas.

Read more
Friday, July 13, 2018

We’ve teamed up with Naturalmat to offer one lucky reader the chance to win a duvet and pillow collection worth £225

Read more
 
Great British Holidays advert link

Newsletter Sign Up

Sign up to the following newsletters:

Sign up to receive our regular email newsletter

Our Privacy Policy


Topics of Interest

Food and Drink Directory

Subscribe or buy a mag today

subscription ad

Local Business Directory

Surrey's trusted business finder

Job search in your local area



Property Search