Guide to Second Home Mortgages - Richard Kendall Estate Agents

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Buying a second property in the UK can be a complicated process as the government seeks to cut down on second property ownership due to the housing shortage. This guide will discover the ins and outs of buying a second property.

What Makes a Second Property Different from the First? Buying a second property comes with its own unique set of challenges and considerations. Unlike your first property, where you may have enjoyed tax breaks such as no or lower stamp duty and a wide range of mortgage options. With a second property, there will not be as many mortgage products available as the key requirement for residential mortgages is to reside in the house you are buying.

Will I Need a Different Type of Mortgage?

Yes, if you are buying a second property, you will need a different type of mortgage. The specific type of mortgage required will depend on how you plan to use the property. For example, if you intend to let out your second property to holidaymakers, you will need a holiday let mortgage. On the other hand, if the second property will be your own holiday home, you will require a residential second home mortgage. Our expert team of mortgage brokers can provide guidance and help you find the most suitable product based on your needs.

How Much Can I Borrow for a Second Property?

The amount you can borrow for a second property depends on its purpose. If you plan to buy a property for buy-to-let purposes, the lender will primarily consider the property’s monthly rental assessment. If the rental income meets the lender’s calculation, you can typically borrow up to 75% loan-to-value (LTV). However, if the second property will be another residence, you may face challenges with mortgage affordability. Your income is likely to be stretched from your primary residence, especially if you already have a mortgage on it. Consequently, you should expect to borrow less for your second property compared to your primary residence.

What Costs are Involved with Buying a Second Property?

Conveyancing Costs

Conveyancing costs in the UK typically average around £1,500. These costs cover various aspects, including property searches, contract drafting, and filing ownership with the Land Registry. Insurance Costs

You will need buildings cover (home insurance) for your second property, and since you may not occupy the property for most of the year, the insurance premiums can be higher.

Stamp Duty

Stamp Duty Land Tax (SDLT) applies to second properties and is charged at the standard rate plus an additional surcharge of 3%. The rules for second home stamp duty are complex and even apply to properties outside the UK. For instance, if you own a property in France and are purchasing your first home in the UK, you will be subject to the second home stamp duty rate. The amount of stamp duty payable varies based on the property’s value, with a property valued at £300,000 incurring a stamp duty charge of £11,500.

Deposit

As with a standard residential mortgage, you will need to provide a deposit for your second property. The minimum deposit requirement for a residential mortgage on a second property can vary depending on the lender but generally tends to be around 15-20% of the purchase price. The deposit requirements for a second residential property are often higher than for a first time buyer. How a Mortgage Broker Can Help A mortgage broker is vital when trying to secure a second home mortgage. With access to a wide array of lenders and mortgage products, a broker can identify options specifically suited to the borrower’s financial profile and the unique considerations of purchasing a second home.

Are you looking to buy a second home? Richard Kendall Estate Agent works in partnership with SMH Finance LLP who would provide the 𝗺𝗼𝗿𝘁𝗴𝗮𝗴𝗲 𝗮𝗱𝘃𝗶𝗰𝗲. Speak to one of SMH Finance LLP specialists today

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Amanda and the rest of the Richard Kendall team has been amazing throughout. We've had some people cancel on the viewings and didn't show up at all but the Team didn't fail to chase them as well as keeping us updated all the time. Also, thankful for the team for following our instruction throughout and keeping us in the loop when we've sold the house. Sarah 20/12/2024

The Kendalls team are very efficient!They always answer emails/ phone calls promptly and keep me well informed.They are happy to help with any queries and sort out ongoing jobs. Kelly Scoffins has worked very hard to help us, always cheerful, friendly and nothing we ask is too much trouble. NKB 20/12/2024

The Pontefract Branch of Richard Kendall Estate Agents (operating out of Normanton) sold my property recently and we were pleased with the overall service provided. Our initial contact with "Kendall's" was enough for us to select them over two competitors who also quoted for our business. The photographs of our property were excellent, but the initial draft of our property details was "boiler-plate" and required significant revision to reflect its locational characteristics. Thankfully, this revision was completed swiftly and did not delay our property going to market. The number of viewings was a little disappointing but reflected market conditions, the price point of our property and its semi-rural location. Despite the limited number of viewings we agreed a sale within two months of our property being put on the market; we achieved more than 98% of our asking price. Unfortunately, largely due to our buyers and their advisors, it took a further six months to achieve completion. Whilst this delay was frustrating, we were kept informed of the situation by Alison Atkinson who service was calm, responsive and excellent throughout; her personal performance was 5 star! Overall, we would recommend Richard Kendall to anyone contemplating the sale of their home. Ian 20/12/2024

We recently sold and bought a house through Richard Kendall with Sarah as our estate agent. She was brilliant throughout, she always kept us up to date with weekly updates, chased replies from solicitors/ other parties in the chain and anticipated our needs when different issues cropped up, making a stressful process a lot easier! We can’t thank Sarah and the rest of the Richard Kendall team enough for all their help! We highly recommend! Ellie 20/12/2024

Very helpful and professional, made the transaction very easy Emma 20/12/2024

I have just sold a property and the whole process was managed impeccably by Mandy Bennett. Throughout the sale I received regular progress updates, she coordinated with the solicitors and when needed she gave them a nudge to ensure the sale proceeded promptly. I cannot praise Mandy highly enough, she is a pleasure to work with and her professionalism and proactive approach resulted in a speedy and stress free sale. Davd 20/12/2024

We have recently sold our property via Kendalls @ Wakefield. Our allocated agents, Shireen and Catherine dealt with a difficult sale very professionally and were always on hand to offer help and assistance. The fee was very attractive. A first sale fell through due to the purchasers home developing an issue, but a new buyer was found and the sale proceeded without any issues. Well done. Jill 20/12/2024

Many thanks Karen for your help and kindness Karen went above and beyondto help me with the saleShe kept me updated every step of the way Her service to me was second to none Thank You Karen Jean 20/12/2024

Donna and Suzanne were amazing for the purchase of our family home. They were professional and kept us informed with every step. They chased solicitors on a regular basis and answered any questions we had. Our only regret was not using them for the sale of our property, as we could not fault the service provided. Hannalease 20/12/2024

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