Our attitude to property ownership is changing. These days, a second home investment means more than simply having a lovely pied-a-terre to visit from time to time. It seems that we are moving away from the traditional idea of staying in a single, primary residence for most of the year.

The Lifestyle Advantage Of Multiple Homes

Regular business commitments, the pursuit of leisure opportunities and catching up with family are just some reasons why homeowners nowadays prefer to share their time between several homes.  

Another important consideration is convenience: when you turn the key in your own front door, you know that everything from the configuration of your TV and sound system to the wine in your fridge will be just as you want it to be. 

For those who regularly travel between different countries for business, a second investment property can significantly improve work/life balance. While staying at a hotel may offer certain benefits, you can avoid the hassle of having to pack and unpack, not to mention the disturbed sleep patterns that often result from sleeping in an unfamiliar bed. 

With no check-in, no fuss and no time needed for ‘settling in’, you can get on with your busy schedule as soon as you arrive. 

Buying A Second Home In London

The UK property market has long been recognised as an investment haven, offering excellent returns for long-term investors. So naturally, many second time home buyers in the UK are attracted to London because of its status as a global business and cultural hub. 

Prime London prices are just beginning to rise again after five years of political and economic uncertainty, so this could be the ideal time to buy a second home in the capital.

But how do you obtain a mortgage, and what are the tax implications, mainly if you are an overseas buyer purchasing a property in London?

Securing International Mortgages For Uk Properties

This year the number of mortgage products on the market has reached an all-time high. However, while UK-based buyers will find plenty of products available, overseas investors seeking a mortgage for an international property purchase may have a more limited choice. 

If you are a non-UK resident, most lenders will undertake thorough identity checks and expect you to have a traceable credit history within the UK. 

If you are paying a mortgage on your present home, you may find the mortgage requirements are more challenging when you apply for a second mortgage, as you will be seen as a higher risk by the lender. 

This will apply even if you eventually intend to make your second home your primary residence.

Generally speaking, if you are seeking a mortgage for a second home, it is advisable to obtain specialist advice from a mortgage broker.

How Much Stamp Duty Will I Pay For A Second Home In 2021? 

Homebuyers purchasing a second UK residential property (whether that is a second home, buy-to-let investment or holiday home) will pay a 3% Stamp Duty Land Tax (SDLT) surcharge on top of the usual Stamp Duty rate. 

The Stamp Duty holiday is now drawing to a close. Still, currently, no Stamp Duty will be payable on £250,000 of a residential property’s value if the property transaction completes by 30th September 2021. After that date, the SDLT rate will return to £125,000.  

Buyers who are not residents in the UK must also pay a surcharge of 2% when purchasing a residential property. Individuals who have spent less than 183 days in the UK in the twelve months before the date of their purchase will be treated as non-UK residents. 

However, if they spend a minimum of 183 days in the UK in the 12 months following the purchase, they may be eligible to claim a refund.

Next Step Towards Your Second Home Investment

If you are thinking of buying a second home, our experienced sales team would be happy to advise you. As estate agents specialising in both London luxury homes and overseas investments, we can offer you the widest possible choice of properties.  
Why not browse our properties for sale in London or get in touch and tell us what you are looking for?