The dream of owning a second home is a milestone for many people, whether they're drawn to a snug coastal weekend hideaway, a luxurious holiday retreat abroad, or a Buy-To-Let property promising rental income.
Adding another property to your portfolio can be thrilling and financially beneficial, but it's a decision that deserves careful thought.
There are several critical factors to weigh, from additional costs to understanding tax implications, before you make the leap.
Here’s our step-by-step guide to help you decide if buying a second home in 2025 is the right move for you.
Why People Buy a Second Property
There are many reasons why buyers choose to purchase an additional property:
A holiday home – somewhere to escape to at weekends or during the summer.
A buy-to-let investment – generating monthly rental income and long-term capital growth.
Supporting family – helping children get onto the property ladder or providing a place to live while studying.
Planning for retirement – securing a future downsized home while renting it out in the meantime.
Understanding your motivation is the first step, as it shapes the type of property and mortgage you’ll need.
The True Cost of a Second Home
Buying a second property involves more than just the asking price. You’ll also need to factor in:
Ongoing costs: Think about maintenance, insurance, council tax, and utilities, these can quickly add up.
Stamp Duty Land Tax (SDLT): Second homes in the UK carry a 3% surcharge on top of the standard rate.
Deposit requirements: Most lenders require at least a 25% deposit for second homes or buy-to-let mortgages.
Mortgage affordability checks: You’ll need to prove you can afford repayments on both your main home and the second property.
Tax Implications to Be Aware Of
Buying a second home has important tax considerations:
Stamp Duty surcharge applies from the outset.
Capital Gains Tax (CGT) may be due if you sell the second property for a profit.
Rental income tax applies if you rent the property out.
These rules can be complex, so it’s always wise to seek advice from a qualified tax professional before committing.
Choosing the Right Location
The location of your second property should reflect your long-term goals:
Holiday retreat: Choose somewhere you’ll genuinely enjoy visiting, with good transport links.
Buy-to-let: Research local rental demand, average rents, and yield potential.
Family support: Consider proximity to universities, schools, or workplaces.
A great location is one of the most reliable ways to protect and grow your investment.
When Is the Right Time to Buy a Second Home?
There’s no one-size-fits-all answer, but you might be ready if:
You have enough equity in your current home.
You can comfortably afford repayments and running costs.
You’ve accounted for Stamp Duty and potential tax implications.
You have a clear long-term reason for buying (holiday, rental, or future home).
If you’re unsure, speak to a mortgage advisor to check your affordability and explore your options.
Practical Steps to Take
Get an Agreement in Principle to understand your borrowing power.
Budget carefully for all upfront and ongoing costs.
Arrange specialist insurance for second homes or rental properties.
Book a professional survey if you’re buying an older home.
Seek expert advice to ensure your decision makes financial sense.
Find a Mortgage
What does a mortgage finder do?
Our free Mortgage Finder tool helps you compare a wide range of deals based on your personal circumstances, including your budget, deposit and property goals.
It’s quick, easy and won’t affect your credit score.
How to use a mortgage finder?
1️⃣ Select your purpose (choose from first time buyer, purchase or remortgage)
2️⃣ Choose the mortgage type (residential or buy-to-let)
3️⃣ Enter the property value, deposit and mortgage term
4️⃣ Click Search to see a tailored list of available deals
At Windsor Hill Mortgages, we help homeowners and investors every day. Whether you’re considering a second home for personal use or as an investment, we’ll guide you through the process, compare the best mortgage options, and make sure you understand the costs and benefits before committing.
Whether you’re a first-time buyer or a seasoned property developer our team will find you the very best deal.
Our experienced financial, insurance and mortgage advisors take real pride in offering impartial advice, so you’ll have the peace of mind that your best interests are at the heart of everything we do.
Based in Bath, we enjoy getting to know our clients and listening to their requirements we provide the right financial solutions every time.
