Second homeowners face forced sales
by Gill Montia
The credit crisis and an economic slowdown could force one in four second homeowners in England to downsize to one property over the next two years.
Economic forecasting consultancy, Capital Economics, is predicting that falling house prices and the increased cost involved in running a second home will prompt many to sell.
This could mean that by 2010, around 60,000 second homes will have come onto the market, increasing the supply of homes for sale by up to 6%.
The south west has a high concentration of second homes, many of which are located in coastal towns.
The impact of second home sales on local property markets could be substantial, as demand for main residences will be below average in some of the locations.
According to the author of the report, Seema Shah, the high property inflation of the past decade persuaded many second homeowners to bear the cost of a second property.
Second home ownership has increased by 20% in the past 14 years, however, with house prices now falling one major benefit is fading fast.
Capital is currently forecasting that UK house price will fall by 20% by the end of 2009.
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