Homeowners are pulling at their purse strings and pulling up their metaphorical drawbridges as they stay put at home. New statistics reveal that the number of second home purchases both at home and abroad have slumped as the recession takes hold.
Falling demand
There have been big falls in both the number of second homes in much of England and in average prices in traditional second home owning territory. In Westminster - where 6.5% of properties are registered as second homes - there has been a fall of nearly a quarter in the number of registered second homes, according to the latest analysis by Savills Research.
Other areas have shown significant, though smaller, reductions in second home ownership. In South Hams, in Hampshire, there was a 5.9% fall in second homes and in North Norfolk there was a drop of 3.4%. Other holiday home hotspots have seen years of growth grind to a halt, with increases in second home ownership in East Anglia and the South West dropping to a mere 0.7%.
Second home ownership in England reached a record high of 245,000 properties only last year.
Good news for some
The reduction in holiday home ownership is at least good news for younger first time buyers in areas where they have traditionally been priced out of the market - and for would-be second home purchasers who still have cash. In Devon, house prices have dropped 24% since they peaked in mid 2007. In Cornwall, they have fallen 21%.
It is a similar story in other desirable areas. In the Cotswolds, prices have reduced by 18.6%; and in Suffolk, Norfolk and Dorset by 15%. However, locations close to London that are suitable for weekend retreats rather than holiday homes have retained more of their price.
"There is clearly a significant difference between the working week pied à terre in central London and the classic weekend retreat or holiday home, but both qualify for a second home designation", says Lucian Cook, director of residential research at Savills.
It's different in London
"We are certain that falls in registered second home ownership in central London locations are not wholly attributable to redundancy or financial concerns as we have not seen an associated rise in property for sale. Rather, we believe that the reasons are more prosaic. For example, owners need a permanent home to secure a parking permit, which may well have triggered them to forego the benefits of a second home registration and re-register their property for full council tax."
In areas where it is possible to commute to London, prices may have been protected to an extent by people choosing to relocate from the capital, adds Cook.
But in resort towns such as Salcombe in Devon and Rock in Cornwall - where 40% of dwellings are second homes and prices rose exponentially in recent years - the house market is now quiet, says Cook. He expects "turnover and prices to remain suppressed for some time to come".
Quality counts
There is also a marked difference, Savills found, in price performance according to the quality of the home. The most attractive properties have fallen in value by less than 12% since their peak, while the least attractive have lost more than a quarter of their price.
Comparable demand trends can be observed in the overseas house buying market. The agency Look4aproperty reports enquiries for overseas homes is down 80%. Chief executive Aaron Turner says the "market is looking pretty dead". He adds "people are no longer serious about buying overseas".
However, it seems that the old virtues of good publicity and pretty pictures can still counter other trends, even in a recession. Mamma Mia is not only the highest grossing film in British history, it has also sparked a flood of enquiries for home buying in Greek islands. One property agency has reported a 120% rise in potential buyers visiting Greece to view homes for sale and a nearly three-fold increase in expressions of interest.
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The reduction in holiday home ownership is at least good news for younger first time buyers in areas where they have traditionally been priced out of the market - and for would-be second home purchasers who still have cash.
