Editor's note: This brief was summarised by The Property AI Newsroom from a report by PropertyWire. Read the original article for full details.
Second Home Markets in England See Price Drops and Fewer Owners
House prices have declined in 20 of the 25 English local authorities with the highest concentration of second homes by the first quarter of 2026, according to analysis by wealth manager Rathbones. The number of second homes in England has also fallen by approximately 12,000 since 2024, representing a 4.3% decrease, based on government figures.
The analysis shows that price falls in these second home hotspots are more widespread than in the wider UK market, where only 26% of local authorities have seen declines. Coastal and rural areas, which are traditionally popular for holiday homes, have experienced some of the steepest drops. South Hams in Devon, the area with the highest concentration of second homes in England, recorded an annual price decline of 6.6%.
Rathbones’ analysis suggests that the financial appeal of owning additional properties has lessened, with unfavourable tax changes cited as a contributing factor. The Stamp Duty surcharge on additional properties increased from 3% to 5% in October 2024. English councils now have the authority to impose a 100% council tax premium on second homes, while local authorities in Wales can levy premiums of up to 300%.
The regulatory environment for property investors has also tightened, with landlords facing increased compliance requirements across multiple property sectors. Liberal Democrat MP Andrew George has proposed new planning powers to allow councils to restrict the conversion of homes into second homes in areas with housing shortages, according to reports in The Telegraph. Although this Private Member’s Bill is unlikely to become law, it reflects growing political pressure on second home ownership.
The combination of increased taxation, regulatory changes, and declining property values in traditional second home markets marks a significant shift in the investment landscape. Similar pressures are affecting buy-to-let investors, with affordability concerns emerging in various housing schemes across the UK. The data points to a structural change in the second home market, with financial incentives for ownership of additional properties diminishing in England’s traditional holiday home destinations.
Source: PropertyWire