Second-Home Owners in England Climb to Nine-Year High on Borrowing Costs

The number of second-home owners in England rose in 2009 to the highest in at least nine years, fueled by low borrowing costs and an increase in tourism, Knight Frank LLC said.

The number of people owning an additional home increased 2.6 percent to 245,384, the London-based property broker said in an e-mailed report today. Knight Frank predicted that the total will climb another 2 percent to more than 250,000 this year.

“Interest rates are much lower than they were in the early 1990s, which has reduced both the cost of acquiring property and the attraction of keeping money in cash,” Liam Bailey, head of residential research at Knight Frank, said in the report. “The recovery from the recession has coincided with a trend for taking holidays in the U.K.”

Interest rates have been at a record low of 0.5 percent since March 2009 as the Bank of England seeks to fuel the economy’s growth. The weakness of the pound against the dollar and other currencies has made overseas travel more expensive, encouraging more people to take their vacation in the U.K.

Knight Frank’s survey was based on data compiled by the Department of Communities and Local Government. It covers previously-owned homes and purpose-built properties in which the owner will live for some of the year. The report excludes timeshare resorts.

To contact the reporter on this story: Peter Woodifield in Edinburgh at pwoodifield@bloomberg.net.

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