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A question many prospective buyers are asking: is owning a second home still worth it?
In a recent feature in the Daily Mail, journalist Liz Rowlinson explores how rising taxes, higher running costs and changing government policies are making traditional second-home ownership increasingly expensive across the UK.
The article draws on research provided by Equity Residences to illustrate just how significant those costs can become over time. The analysis also considers what buyers give up when they tie significant capital to a second home rather than to other investments.
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According to the research, a £2 million second UK- based home could generate more than £1.2 million in additional costs over five years, before accounting for renovations, furnishing or estate planning. The analysis highlights expenses that many buyers overlook, from stamp duty and council tax to maintenance costs and the opportunity cost of tying up capital in a single home.
Our Managing Director Greg Salley explains how these costs can alter the economics of traditional second-home ownership, particularly for buyers who view a luxury home primarily as an investment.
Key Takeaways: The numbers behind the analysis
- £370,000 in upfront costs: A £2 million second home can come with substantial acquisition costs, including stamp duty, legal fees and surveys.
- £450,000 in opportunity cost: Over five years, our analysis estimates the potential return foregone by having capital tied up in the property rather than invested elsewhere, up to £83,000 a year in running costs: Council tax, maintenance and other expenses can add significantly to the cost of holding a second home.
- Around £96,000 in potential capital gains tax: On an illustrative £400,000 increase in value, a higher-rate taxpayer could face a significant tax liability on exit.
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Beyond the numbers, the feature speaks with holiday homeowners who have successfully offset some of these costs by renting out their homes, while also acknowledging the additional work and financial uncertainty that come with managing a standalone second home. As the article makes clear, today’s buyers are looking beyond the purchase price. Understanding the full cost of ownership has become just as important as choosing the right destination.
