| Spending on second homes triples in last three years |
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LONDON - Britons are increasingly turning towards second homes as a safe investment. This assumption is based on the fact that spending on second homes has tripled over the last three years from £2 billion per year in 2002 to £6 billion per year in the current year.
Most of these investments are either centered on buy-to-let homes or on second homes, the Family Spending Report says. Additionally, the lure of owning overseas property is also tempting consumers. Alex Wright, the director of foreign exchange specialists HIFX said that Spain and France continued to be favored investment spots. "We have seen increased interest for investment property in Bulgaria and Dubai; even Canada and Switzerland have seen their fortunes rise and new locations pop up all the time: Egypt, Brazil and central Europe," he commented. He added that since the UK housing market was flat over most of last year, consumers were beginning to look for greener pastures.
Wright was of the opinion that the housing market would soon witness hectic activity as the A-Day approached, “It could get even busier with Sipps covering overseas property from April 2006. There is so much activity that December sees the launch of a specific Overseas Property Industry trade show (OPP Live) at Alexandra Palace on eighth and ninth," he observed. From April 6 onwards, consumers can put residential properties like a second home or a holiday home on a Self Invested Personal Pension or SIPP. Current rules mean that high-end taxpayers, meaning the ones with excess income could end up paying only about £120,000 for a £200,000 property.
However, consumers can borrow only 50 percent of the loan. The FSA has already warned that shady elements were flooding the markets with SIPPs offers. It has asked consumers to be very careful before committing themselves.
Posted
on : Fri, 02 Dec 2005 01:35 GMT | Investments News
By : Paula Jenkins
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