Second homes: Brexit exodus draws buyers to Devon cream

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The UK’s second-home capital is a Devon seaside resort. Nearly a fifth of all homes in Salcombe and surrounding villages are used for holidays, to the chagrin of many priced-out locals. House prices there have spiralled to a mean of £1.2mn, about four times the national average. 

In Britain, the proportion of households with a second home is unchanged at 3 per cent over the past decade. That is less than in France, where the ratio is one in 10 or China, where more than a fifth of urban households own multiple homes.

But the location of British bolt holes has shifted. Ten years ago, Brits were more likely to opt for a second home in France or Spain. Brexit has since restricted the time UK citizens can spend in the EU. As a result, six out of 10 second homes are within the UK.

International buyers are more likely to opt for a Mediterranean villa, Alpine ski chalet or Tuscan farmhouse. The most sought-after second home location is the Côte d’Azur, according to a Savills ranking.

Climate change might reshuffle the pack. Properties with good rail connections could appeal to buyers keen to limit the expansion in their carbon footprint. In Sweden, the epicentre of the “flight shaming” movement, there is already a tradition of holidaying close to home.

Climate change will also take a toll on prized destinations, notably lower- altitude ski resorts where snow will be rarer and coastal destinations that are vulnerable to sea level rises. Scorching summers may increase the popularity of northern Europe at the expense of the south. 

There is an increasingly hostile political climate too. UK second homeowners already pay stamp duty surcharges. Many more are set to pay higher council tax when new legislation is passed. Wales recently hiked its maximum council tax premium for second homeowners to 300 per cent.

Deterrents can backfire. A Swiss ban on the construction of new second homes in some areas was ineffective and led to a rise in unemployment, according to research published by the Centre for Economic Performance. It found existing second-home investors were the real beneficiaries.

That helps explain why price rises for prime ski resort properties — 15 per cent in the year to June — were more than twice the holiday home average recorded by Savills. The coronavirus pandemic-era boost has not fully dissipated.

Hybrid working will underpin demand for second homes by allowing people to spend more time away from their city base.

The Lex team is interested in hearing more from readers. Is a second home in Devon a good investment? Please tell us what you think in the comments section below.