Buying a Second Home

Guide to buying a second home

Almost three-quarters of a million households in England own a second home, according to official government figures.

Half a million of these homes are located in the UK.

Second homes are either:

• Homes that are mainly used as a holiday home or for occupation while working away from home. Some people may rent out their second homes for a few weeks or months of the year as holiday let, but that is not their main purpose; or
• Homes that are bought for the benefit of another. Getting on the property ladder can be tough, so you may buy a second property for your adult child to live in as a way to offer a helping hand.

Buy-to-let properties are investment properties and we have separate resources for that. If you are thinking about making your first buy-to-let investment or expanding your rental property portfolio, our buy-to-let solicitors can provide expert advice.

How is buying a second home different to buying a primary residence?

The legal conveyancing process follows the same basic steps, regardless of whether the property is your main home or a second home.

Your solicitor will perform the usual checks and searches to ensure that property has a good and marketable title. They will also verify that there are no restrictions that could hamper how you plan to use the property. For instance, there might be covenants or restrictions in the title that stop you from using the property as a holiday let if you do want to Airbnb it some of the time.

Additionally, some holiday areas require special attention. There may be planning conditions that limit occupancy to those with ties to the local area, or you may need permissions to carry out refurbishments if the home is in an Area of Outstanding Natural Beauty or a National Park. Your solicitor can explain the legal and practical implications of these types of conditions.

Besides the conveyancing process, there are some key financial differences in the way you purchase a second home, mostly around tax and mortgages.

Financing the purchase of a second home

Unless you are fortunate to be able to buy outright, you will need a mortgage to finance the purchase of a second home.

Mortgaging a personal bolt hole

A standard residential mortgage is suitable if you are planning to use your second home yourself and have no plans to rent it out. Your lender will want to ensure that you can manage the payments on both your existing mortgage and the new one, so expect a thorough review of your financial situation. To reassure them, they will likely require a larger deposit, usually about 15% to 20% of the property’s value.

Paying off the mortgage on your first home will put you in a better position to secure a mortgage on your second home.

If you plan to use the property as a private holiday home but later decide to rent it out, you will have to apply for consent from your mortgage lender. Your solicitor can check these restrictions before you commit.

Mortgaging a rental property

A furnished property that is available to let for 210 or more days a year is classified as a holiday let property and cannot be bought with a standard residential mortgage. Some lenders also won’t let you borrow on short-term lets like Airbnb because the number of guests is a risk.

You may need to shop around for a commercial mortgage product.

Using the equity in your main home for a second home

If there is sufficient equity in your main home, then remortgaging to release funds to assist in buying a second home is an option. You may be able to remortgage with your existing lender or switch to a new mortgage provider.

Equity-release mortgages offer another option for releasing some of the equity in your home as a tax-free cash lump sum which you can use to fund a second home purchase. Aimed at older homeowners, these products are structured as a lifetime mortgage and repayable when the borrower dies or enters long-term care, so you don’t need to make monthly repayments.

Whether refinancing or equity release is a good idea or not will depend on the amount of equity you have, the conditions of the mortgage product, and whether the refinancing will trigger any early repayment charges.

Our expert remortgaging solicitors at Osbornes Law can help explain your options.

Stamp Duty Land Tax on second homes

Stamp Duty Land Tax is payable on any residential property over £250,000 in England. The tax is charged on a sliding scale according to the home’s value.

However, if you already own a residential property, the threshold is lower. If the second property is worth more than £40,000, you’ll have to pay stamp duty on the whole purchase price.

You’ll also pay a higher percentage of stamp duty, which currently is 3% on top of the ordinary stamp duty rate. So, on a home costing £500,000, instead of paying £12,500, you will pay £27,500.

There is a stamp duty calculator on the government website which can help you work out how much you might have to pay.

Council tax on second homes

Most councils do not give a council tax discount for second homes. There may be some discounts for job-related accommodation which your solicitor can advise on.

From 1 April 2025, you can be charged up to twice the normal council tax for a second home. Each council will decide whether the property is a ‘second home’ and whether to charge this additional tax, and must give a year’s notice when adopting this policy. Not all councils have voted on this yet, so check with your local council before purchasing a second home.

In Wales, local authorities already have the ability to set council tax premiums on second homes at 300% of the standard council tax rate.

Some properties are liable to pay business rates instead of residential council tax. Currently in England, if your property is available for holiday let for 140 days a year, and is actually let for at least 70 days, you pay business rates rather than council tax. This could be beneficial, especially as some councils are looking to increase council tax on second homes.

Thinking of buying a second home?

If you’re thinking about buying a second home in the UK, you probably have plenty of questions regarding mortgages, taxes and more. That’s where we come in.

At Osbornes Law, our team of conveyancing solicitors has a wealth of experience in guiding people through the process of buying a second home. You can feel confident working with us to make your second home purchase smooth and straightforward, with all the proper legalities taken care of.

To speak with one of our solicitors, contact us by:

• Filling in our online enquiry form; or
• Calling us on 020 7485 8811