Copy article

CGT hit on second homes in holiday hotspots

ended 23. September 2024

A journalist on Mail Online is putting together a piece on the rush to sell second homes in holiday hotspots in light of the projected rise in capital gains tax.

He's looking for two things - hopefully we can help him out with both.

Case studies:

He has a case study in the Cotswolds, and is looking for a couple more, perhaps in Cornwall or Norfolk, but essentially anywhere that fits the bill in terms of a holiday hotspot.

Comment:

Comment in relation to homeowners who are rushing to sell second homes in holiday hotspots.

1/ Have you seen a rush of people putting their second homes (holiday homes) on the market?

2/ Are you seeing prices falling in holiday hotspot areas as a glut of properties come onto the market? 

3/ Is this glut of properties a direct result of the impending CGT hike?

4/ Do you think CGT hike will kill the market for second homes in holiday hotspots?

The journalist is looking to publish the story later this afternoon?


 

2 responses from the Newspage community

Copy all

Copy

Editor
Kate Allen
Owner at Finest Stays
Salcombe currently has over 70 homes for sale, mostly second homes—levels not seen in over a decade. Are sellers rushing to beat the CGT hike? Possibly, but time is tight. Multiple factors are driving this trend, including the CGT increase, new legislation to register holiday homes, and the potential end of Furnished Holiday Let (FHL) tax relief.

Despite the surge, prices aren’t falling. Salcombe remains unaffordable for locals, even though some view it as a way to free up homes. The bigger issue is that past governments have consistently missed housing targets.

The CGT hike won’t kill the second-home market. Instead, we may see a return to traditional holiday homeowners—those who love the area, use the property occasionally, and rent it out the rest of the year.

The solution lies in balancing holiday home availability with community needs. Renting out holiday homes helps keep local economies thriving year-round.
Copy

Tim Allcott
Managing Partner at Allcott Associates
We've seen an uptick in enquiries from Devon, the Cotswolds and Stratford-upon-Avon, pushing for a fast turnaround. However, we are predicting that this will be a short term increase, followed by a reciprocal lag in sales, and within a year or so we expect to see purchases and sales back at normal levels.
Those already planning to sell within the next year or so are bringing their plans forwards, but overall property remains a sound investment in the longer term, despite tax rises. People also tend to have emotional attachments to properties bought for their personal use as second homes, which can be more influential than tax rates.
Of course, it's a different story when people invest in property to rent out to holiday-makers, but we believe potential changes to legislation around short-term lets would have a much bigger impact than CGT changes on people deciding whether or not to invest in holiday hotspots.