New research shows that while Cornwall sits top when it comes to the sheer size of the nation’s second home housing market, it’s the prime London boroughs of Kensington and Westminster that are home to the highest market value where secondary properties are concerned.
London-based estate agency Benham and Reeves analysed existing government data on the number of second homes across each area of England and Wales, before looking at the total market value of this secondary level of the housing market based on the current average property price for each property type in line with the number of second homes recorded for each property type.
The research shows that across England and Wales, there are 141,245 second homes, with flats proving the most popular, accounting for 42% of all second homes, whilst detached properties are the second most common second home at 24%.
This is a trend that is generally observed across all regions of the UK, although in the East Midlands (28%), East of England (34%) and Wales (41%), detached homes rank as the most common type of second home, where as in the North East, terraced homes account for 38% of all second homes.
In London, flats remain the most common type of second home, but the second home market within the capital is unique compared to other regions given that flats account for a huge 87% of all second homes.
Cornwall ranks top as the nation’s second home hotspot based on sheer volume, with 9,425 second homes, by far the most of any local authority in England and Wales.
However, it is the prime London locations of Kensington and Chelsea and Westminster that are the nation’s most prestigious second home housing markets.
Across England and Wales, Benham and Reeves estimates that the total market value of the nation’s second homes currently sits at a whopping £42.761bn
Kensington and Chelsea tops the table at local authority level, where the second home housing market is estimated to be worth over £6bn, followed by Westminster at £4.103bn.
Cornwall ranks as the most valuable second home housing market outside of London at £2.873bn, with Tower Hamlets (£1.375bn), North Yorkshire (£1.036bn) and South Hams (£1.031bn) also home to a second home market value of over £1bn.
Marc von Grundherr, director of Benham and Reeves, said: “The sheer size and value of the second home housing market is immense, to say the least, and you can certainly see why local residents in areas such as Cornwall are against so many homes being owned on a secondary basis and left vacant for much of the year.
“However, it’s fair to say that this particular issue regarding the second homes market is one largely confined to holiday hotspots and, in fact, the second homes market provides a great deal of positive investment into the property market elsewhere across the nation.
“London is a particularly good example of this, and we’ve seen many foreign buyers invest into the local housing market in recent times, which in turn has helped to cultivate positive property appreciation for other domestic homeowners, at a time when the market has otherwise been fairly stagnant.
“Regeneration of many locations, with improved connectivity and infrastructure plus the introduction of buy-to-let in the nineties, have made London an attractive proposition. And despite the introduction of an extra 5% tax on each purchase for foreign investors, 89% of these buyers rent their properties out. Without this vital investment, there would be less properties to go around, rents would be even higher than they are now, and many people would no longer be able to afford to live in the capital, affecting the workforce hugely.
“So whilst there certainly needs to be some protection for local homeowners in certain locations, it’s simply not right that we look to eradicate second homeownership as a whole, as it plays a vital role in the ecosystem of the national property market.”
