More buyers have bought second homes during the pandemic than ever before, according to Knight Frank.
Second home purchases outside of London increased by 83% in the first eight months of 2021 compared to the five-year average.
Consistent with reports of a booming second homes market in the South West during the year of the staycation, the number of transactions liable for the second home 3% stamp duty surcharge hit a new high of 84,700 in the second quarter of this year.
The surcharge accounted for £485m of the £2.06bn of residential stamp duty collected in Q2 2021, the largest slice (24%) on record. It was also the largest contribution by value since Q4 2017.
The figures do include buy-to-let investors taking advantage of the stamp duty holiday, and the overall stamp take is down thanks to the tapering relief, set to end next week. However, it is nevertheless the single largest quarterly figure since the Higher Rates for Additional Dwellings surcharge was introduced in 2016.
“I am not surprised,” said Mark Proctor, head of the South West region at Knight Frank. “Being told to work from home has enabled people to realise their lifestyle ambitions via a second home, and with the equity that has built up in the London and the South East property markets over the longer term, that five-year plan to buy a second home has come forward considerably for many buyers.”
Second home purchases in the South West, which is more of a traditional target, doubled in the same period.
Meanwhile, the rise in the central region was 58% over the same period, bolstered by a recent focus on the Chipping Norton region of the Cotswolds in the TV show Clarkson’s Farm.
“Clarkson’s Farm is referenced by almost everyone we meet in the area,” said Damian Gray, head of Knight Frank’s central region. “It has put the village and surrounds in the spotlight.”
It is not just a UK phenomenon. According to Knight Frank’s Global Buyers Survey 2021, 33% or international buyers are more likely to buy a second home as a result of Covid-19.
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