Purchasing a second home in the UK: pros & cons

Published Date: January 5, 2023

A dense row of apartments and homes on a city street
Owning a second home is a dream for many, but selecting a location, securing a mortgage and dealing with property management are common barriers for would-be buyers. When it comes to location, buyers in England and beyond have many good reasons to choose a second home in the UK. Whether you want a penthouse in the middle of the city or prefer to escape to the countryside, there’s a UK second home for every taste. Understand the pros and cons of buying a holiday home in the UK, and discover an alternative to the traditional UK second home purchase.

Benefits of owning a UK holiday home

There are many benefits to owning a second home in the UK, including:It can be a good investment: There’s an extremely high demand for property in the UK and a shortage of supply, meaning house prices are often on the rise. People are also able to sell their properties rapidly in the UK marketplace. Some analysts are suggesting a 35% increase in value from 2020 to 2025 for UK properties — meaning you could enjoy your second home and feel confident that you have made a good investment.You can take advantage of the rich history and culture: From Buckingham Palace to Shakespeare and Stonehenge to The Beatles, the UK is a globally influential center of history, culture, and wealth. Britain is also home to Oxford, the oldest university in the English-speaking world, not to mention Windsor Castle, Canterbury Cathedral, and other magnificent architectural feats. The United Kingdom has an endless supply of historical and cultural curiosities for holidaymakers to enjoy.The region is perfect for relaxing breaks: A UK second home offers many opportunities for fun and relaxation, regardless of the location. For those who enjoy the bustling energy of London, having a second home in one of Europe’s most prestigious cities is truly something to be proud of. While great for nightlife, this classy metropolis also offers plenty of opportunities for a quiet getaway. You can take a stroll around Kensington Gardens or attend one of London’s many theatres. Venture beyond the cities, and you’ll discover the UK is home to some of the most stunning countryside in the world. A picnic in the rolling hills and meadows of the Cotswolds may be just what you need to unwind.You could pay lower taxes: The good news is – depending on the local authority – you should pay a lower rate of council tax on your second home. Some local authorities offer a discount for second homes, and most holiday-home owners get a 10% reduction.You have another home to call your own: There’s the joy of owning something that’s yours  — a  place where you might consider retiring to in the long term, where you build up connections with your community and where you feel at home. It could even be a source of second income. 

Cons of owning a UK holiday home

There are also a couple of potential downsides to owning a holiday home in the UK:It can be costly: While the average house price in the UK has risen since 1970, this sustained price increase has placed second home ownership further out of reach for most buyers. Owning a second home has its hassles: Responsibilities of ownerships like bills and maintenance can add on additional costs and hassles. Second homeowners often complain that they spend much of their time dealing with property maintenance and admin instead of relaxing.You can be subject to high resale taxes: If and when you decide to sell your second home, you will be taxed for capital gains on however much the rental property has gained in value since your purchase — this could be up to  28% depending on your tax status.It can be difficult to obtain a mortgage: Lenders have increasingly strict affordability criteria for mortgages, meaning obtaining one for a holiday home could prove challenging. Buyers who are able to secure a loan will likely have to pay a large cash down payment.Mortgage rates are generally higher for a second home, and a second home can incur a stamp duty surcharge of 3%. Temperamental weather: It’s no secret that the UK experiences some wet weather. Luckily, the weather is far milder than many countries, so while you might experience a shower or two, you’ll be neither too hot nor too cold for most of the year. Summers are warm enough in the UK, with temperatures in the mid-to-upper 60s most of the time and up to the mid-80s during the occasional summer heatwave. 

Purchasing a UK holiday home with Pacaso

Buying a second home on your own can be difficult, expensive and a hassle. An alternative to the traditional second home purchase is co-owning a UK holiday home with Pacaso. Here are a few ways Pacaso makes it easier to buy a second home:

Accessible financing

Lenders can be strict when it comes to mortgaging a second home. This is why Pacaso helps you access alternative property financing. We partner with banks and act as your corporate guarantor to help you qualify for a loan of up to 70% of the property’s value, meaning you put down just 30% and finance the remainder. You can own ½ of a property, ¼ or even ⅛, depending on what ownership amount works for you.

Hassle-free ownership

Pacaso eliminates the downsides associated with second home ownership. You don’t have to worry about furnishing or decorating your home, and maintenance, bill payment and cleaning are all taken care of when you own a Pacaso home. Each property is fully stocked with the supplies you need for a relaxing and comfortable stay (view all standard amenities). If there’s anything amiss, you can reach out to your Home Manager or provide feedback through the Pacaso app to help us to improve.

Cutting-edge scheduling app

Our state-of-the-art scheduling app enables you and up to seven co-owners to book dates that suit you. Powered by our SmartStay scheduling system, the app is designed to be fair and flexible, ensuring all owners have equitable access to their home during peak seasons and over holidays. If you have ⅛ ownership in the property, you can book up to six weeks in your home each year.

Easily sell or transfer

Because you have true ownership of your Pacaso, you can set your own price and sell your ownership at any time if the other ownership units in your home are sold. If you bought ½ ownership of a Pacaso property and later realized you’re only using it ⅛ of the time, you can sell a portion of your ownership interest. We won’t try to persuade you not to sell, rather, we will actually help you and give you access to an exclusive buyer marketplace. Or, if you decide your specific property isn’t right for you, you have the option to transfer your ownership to another Pacaso property, and pay or be refunded the difference.

Responsible ownership

Unlike traditional second homes, Pacaso’s co-owned properties are occupied most of the year, which helps to add value to local communities and place less of a burden on them. Co-ownership is the more sustainable, more responsible way to enjoy second home ownership, and Pacaso is the leader in making co-ownership simple and accessible.

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