In a survey of owners in February 2012, almost 60% also confirmed that their property had taken a nose-dive in value since they purchased it and 37% were feeling the squeeze, saying it was a bigger financial burden of late.
The vast majority bought their properties in the last six years, following the boom in UK house prices in 2007 which resulted in a huge rise in equity that owners quickly put to good use buying a second home in the UK or abroad. Over 90% of respondents stated they had property in Europe, with France and Spain unsurprisingly the top two countries, but 53% stayed closer to home in the UK.
Although the rise in equity helped finance these purchases, 44% of respondents still had to take out a mortgage to help fund the investment, with an average loan-to-value of just over 25%. Some are covering this debt with rentals; a canny 24% stated they were fully covering payments with income from holiday lets, but over 20% were paying for the property directly out of their income, pension or savings.
Andy Cockburn, Regional Director for HomeAway.co.uk commented:
"One in four British holidaymakers now opt for a private holiday rental so it seems many second homeowners are still missing a trick. With our average client reporting rental income of £10,000 per year, owners feeling pressure to sell may wish to consider holiday lets.
"Booking enquiries to HomeAway UK sites increased by 28% last year. We expect growth to continue as more holidaymakers discover rentals and make the switch from hotels. Families and groups of friends are the main target as rentals provide the key facilities they need, plus a lower average cost per head."
