A third prefer stocks and shares
Affordability and the resources needed to maintain, run and manage additional properties are putting homeowners off buying, according to Barclays latest Property Insights Report.
Seven in ten don’t want the cost and complexity of being a landlord and a third would rather invest in the stock market.
The study, which surveyed 2,000 UK consumers, found that second homes had become less attractive, with only one in 10 (11%) considering buying an additional property within the next two years. A fifth (22%) said their dreams of owning another property felt out of their financial reach.
High maintenance and running costs were cited by 28% as a barrier to entry and the time taken to manage a property was highlighted by 24%. Stamp duty costs were a barrier for 21% of respondents.
Upfront costs are high for those who have considered or already purchased a second home, with an average deposit of £50,340, stamp duty costs of £29,849 and third-party costs of £5,698 on average – a total cost of £85,887.
Cost and complexity deter would-be landlords
The cost and complexity of being a landlord puts off seven in 10 (69%) of homeowners, while nearly half (48%) believe it’s too high a financial risk in the current economic environment. It comes as Barclays also reports that tenant awareness of the Renters’ Rights Act has risen from 19% in October to 60% now.
More than a third (36%) believe owning additional properties adds pressure to the housing market, and a similar amount (34%) would rather invest in the stock market than property.
Older homeowners also have mixed approaches to their own property investments. More than half (52%) of Baby Boomers – aged 62 to 80 – say they already are or will be mortgage-free by the time they retire and three-quarters (76%) don’t plan to access funds from their property to fund their retirement.
Three in 10 (31%) plan to leave their home as a legacy for their family. Only 8% report plans to downsize to free up money for retirement and only 5% plan to use equity release to do the same.
Jatin Patel, head of mortgages, savings and insurance at Barclays, said: “For most, property is about far more than finances. It provides stability and plays a key role in family legacy, and many retirees do not need to supplement their income through property. ‘Right-sizing’ still has an important part to play in unlocking housing supply, but it will only gain traction if there are clear and meaningful incentives.”
