am I mad to be considering a holiday home
Discussion
For a little while now I've been mulling over in my mind the prospect of owning a flat on the norfolk coast. I'm considering cromer or the areas in the surrounding area - 2ish bed flat for something in the region of £130-150k (about 600-700 sq ft).
There is a niggling bit of my mind which says dont do it. But then another bit of my mind says, take the risk and do it and enjoy it.
so I own a house with the missus (which means I'd have to pay enhanced SDLT so fair enough). the mortgage on that house is under 500 quid a month repayment with 14 years left on it (I think we owe about 75k on it or so). I can probably come up with the deposit on the new flat without having to borrow much, if anything, against the house.
I think to justify the flat (which would only be used by us really at weekends or during school holidays as the wife is a teacher) I would probably air b n b it for a few days here and there to help (if a flat then would need to check the lease to see if this is possible). There are obviously tax implications to that, and I wouldn't make much money off it. So whether its worth it given the wear and tear I dont know.
so is it too tight to do? is it worth it?
fwiw (using round figures):
I earn just over 50k. I dont anticipate any uplift to this because I am fairly lazy and cba to get promoted.
wife is on mat leave but will probably go back to work in the next few months (she earns 37k). I expect most of her salary will be used up for childcare etc, so I'm basing this decision just on my salary.
I can afford the two lots of mortgage (500 for the house and probably 550/600 on the flat plus say 50-100 quid pcm maintenance charge). so call it £1100.00 all in for the two mortgages, plus bills.
does anyone have any horror stories of owning a second property in similar circumstances? or should I just use what we have to holiday on the coast and and when in nice hotels/air b n bs?
part of me also thinks that it will be a good pension move in that we could sell our house in London in 20 year time and move to the flat when retired.
or is this a pipe dream best forgotten about...
There is a niggling bit of my mind which says dont do it. But then another bit of my mind says, take the risk and do it and enjoy it.
so I own a house with the missus (which means I'd have to pay enhanced SDLT so fair enough). the mortgage on that house is under 500 quid a month repayment with 14 years left on it (I think we owe about 75k on it or so). I can probably come up with the deposit on the new flat without having to borrow much, if anything, against the house.
I think to justify the flat (which would only be used by us really at weekends or during school holidays as the wife is a teacher) I would probably air b n b it for a few days here and there to help (if a flat then would need to check the lease to see if this is possible). There are obviously tax implications to that, and I wouldn't make much money off it. So whether its worth it given the wear and tear I dont know.
so is it too tight to do? is it worth it?
fwiw (using round figures):
I earn just over 50k. I dont anticipate any uplift to this because I am fairly lazy and cba to get promoted.
wife is on mat leave but will probably go back to work in the next few months (she earns 37k). I expect most of her salary will be used up for childcare etc, so I'm basing this decision just on my salary.
I can afford the two lots of mortgage (500 for the house and probably 550/600 on the flat plus say 50-100 quid pcm maintenance charge). so call it £1100.00 all in for the two mortgages, plus bills.
does anyone have any horror stories of owning a second property in similar circumstances? or should I just use what we have to holiday on the coast and and when in nice hotels/air b n bs?
part of me also thinks that it will be a good pension move in that we could sell our house in London in 20 year time and move to the flat when retired.
or is this a pipe dream best forgotten about...
How far from the area are you? And how much would you really use it? If just holidays I’d forget it if every other weekend then why not it’s affordable. Air bnb could be a PITA if your not local. Who cleans it, does the check out, maintenance, making beds etc...? But then again if your close enough to pop in at the end of a week iit could be cover itself with just a few weeks a year.
We did it for 12 years. Lived in Essex and had a place in West Runton on the coast. Was fantastic. Had a second social life and made some good friends. Place to lend to good friends and to welcome friends to. Kids loved it roaming around the countryside. Kids got trained from an early age to sit there for hours! , not get car sick and not complain. 
I had a "project" and one of my new neighbours helped a lot. Would do it again. Wish I hadn't sold it.
I had a "project" and one of my new neighbours helped a lot. Would do it again. Wish I hadn't sold it.
What I think you need to consider, and what's always put me off is:
You're paying around £500 a month for your holiday home. This is most people's holiday fund for the year, full stop.
This means therefore that every holiday you have will be in this holiday home. Do you want to go to Norfolk every year whilst you have it?
No variety? No exploring other areas of the UK, never mind the world?
It's always seemed so limiting to me. There's a million other places in the world to see - restricting yourself to one place seems so unimaginative.
Even if you could go to other places, what's the justification when you have your holiday home?
Yes, you'll get some money off AirBnB if you go down that route, and/or from renting it out to mates. Also, it will be worth something when you eventually sell it.
You can also use it quite often, especially if your wife's a teacher.
However, in the here and now, it would be too restrictive for me.
You're paying around £500 a month for your holiday home. This is most people's holiday fund for the year, full stop.
This means therefore that every holiday you have will be in this holiday home. Do you want to go to Norfolk every year whilst you have it?
No variety? No exploring other areas of the UK, never mind the world?
It's always seemed so limiting to me. There's a million other places in the world to see - restricting yourself to one place seems so unimaginative.
Even if you could go to other places, what's the justification when you have your holiday home?
Yes, you'll get some money off AirBnB if you go down that route, and/or from renting it out to mates. Also, it will be worth something when you eventually sell it.
You can also use it quite often, especially if your wife's a teacher.
However, in the here and now, it would be too restrictive for me.
thats another fair point.
500 quid a month is a lot of money to most people, including me. however its not just about "holidays" and that 500 quid being eaten up by the flat rather than going to spain. we could do both. but that 500 quid a month on the flat is going towards buying the flat and having something to use in old age.
thats also quite a big concern to me. even with 2 decent public sector pensions I am slightly concerned about having sufficient income in retirement.
500 quid a month is a lot of money to most people, including me. however its not just about "holidays" and that 500 quid being eaten up by the flat rather than going to spain. we could do both. but that 500 quid a month on the flat is going towards buying the flat and having something to use in old age.
thats also quite a big concern to me. even with 2 decent public sector pensions I am slightly concerned about having sufficient income in retirement.
princeperch said:
thats another fair point.
500 quid a month is a lot of money to most people, including me. however its not just about "holidays" and that 500 quid being eaten up by the flat rather than going to spain. we could do both. but that 500 quid a month on the flat is going towards buying the flat and having something to use in old age.
thats also quite a big concern to me. even with 2 decent public sector pensions I am slightly concerned about having sufficient income in retirement.
I've always been very sceptical about holiday homes as investments. 500 quid a month is a lot of money to most people, including me. however its not just about "holidays" and that 500 quid being eaten up by the flat rather than going to spain. we could do both. but that 500 quid a month on the flat is going towards buying the flat and having something to use in old age.
thats also quite a big concern to me. even with 2 decent public sector pensions I am slightly concerned about having sufficient income in retirement.
On your stated salary, we're talking about 16% of your take-home income going into this 'investment'
That's a lot. If you do budget to go away somewhere else aswell/instead, that's over 30% of your take-home going towards holidays, from one wage.
Yes, you'll recover some of that but it seems a big exposure in one area.
IMO, holiday homes are for when you've reached a certain level of financial comfort, not for when you're effectively on one wage and still have a decent chunk of your main house to pay off.
TLDR - I think you're a bit mad, but it's your money.
Muzzer79 said:
princeperch said:
thats another fair point.
500 quid a month is a lot of money to most people, including me. however its not just about "holidays" and that 500 quid being eaten up by the flat rather than going to spain. we could do both. but that 500 quid a month on the flat is going towards buying the flat and having something to use in old age.
thats also quite a big concern to me. even with 2 decent public sector pensions I am slightly concerned about having sufficient income in retirement.
I've always been very sceptical about holiday homes as investments. 500 quid a month is a lot of money to most people, including me. however its not just about "holidays" and that 500 quid being eaten up by the flat rather than going to spain. we could do both. but that 500 quid a month on the flat is going towards buying the flat and having something to use in old age.
thats also quite a big concern to me. even with 2 decent public sector pensions I am slightly concerned about having sufficient income in retirement.
On your stated salary, we're talking about 16% of your take-home income going into this 'investment'
That's a lot. If you do budget to go away somewhere else aswell/instead, that's over 30% of your take-home going towards holidays, from one wage.
Yes, you'll recover some of that but it seems a big exposure in one area.
IMO, holiday homes are for when you've reached a certain level of financial comfort, not for when you're effectively on one wage and still have a decent chunk of your main house to pay off.
TLDR - I think you're a bit mad, but it's your money.
Muzzer79 said:
What I think you need to consider, and what's always put me off is:
You're paying around £500 a month for your holiday home. This is most people's holiday fund for the year, full stop.
This means therefore that every holiday you have will be in this holiday home. Do you want to go to Norfolk every year whilst you have it?
No variety? No exploring other areas of the UK, never mind the world?
It's always seemed so limiting to me. There's a million other places in the world to see - restricting yourself to one place seems so unimaginative.
Even if you could go to other places, what's the justification when you have your holiday home?
Yes, you'll get some money off AirBnB if you go down that route, and/or from renting it out to mates. Also, it will be worth something when you eventually sell it.
You can also use it quite often, especially if your wife's a teacher.
However, in the here and now, it would be too restrictive for me.
This is exactly what puts us off. Instead we have 2 tried and tested holiday let’s in the lakes one south one north and 1 in Wales. We know they will be spot on, a reasonable cost, that the kids will have fun (going to our holiday home) and we alternate every other year rather than buying our own and having all the hassle associated with it. It’s like having a holiday home without them actually being ours and we haven’t had a bad holiday for the last 5 years. You're paying around £500 a month for your holiday home. This is most people's holiday fund for the year, full stop.
This means therefore that every holiday you have will be in this holiday home. Do you want to go to Norfolk every year whilst you have it?
No variety? No exploring other areas of the UK, never mind the world?
It's always seemed so limiting to me. There's a million other places in the world to see - restricting yourself to one place seems so unimaginative.
Even if you could go to other places, what's the justification when you have your holiday home?
Yes, you'll get some money off AirBnB if you go down that route, and/or from renting it out to mates. Also, it will be worth something when you eventually sell it.
You can also use it quite often, especially if your wife's a teacher.
However, in the here and now, it would be too restrictive for me.
princeperch said:
Muzzer79 said:
princeperch said:
thats another fair point.
500 quid a month is a lot of money to most people, including me. however its not just about "holidays" and that 500 quid being eaten up by the flat rather than going to spain. we could do both. but that 500 quid a month on the flat is going towards buying the flat and having something to use in old age.
thats also quite a big concern to me. even with 2 decent public sector pensions I am slightly concerned about having sufficient income in retirement.
I've always been very sceptical about holiday homes as investments. 500 quid a month is a lot of money to most people, including me. however its not just about "holidays" and that 500 quid being eaten up by the flat rather than going to spain. we could do both. but that 500 quid a month on the flat is going towards buying the flat and having something to use in old age.
thats also quite a big concern to me. even with 2 decent public sector pensions I am slightly concerned about having sufficient income in retirement.
On your stated salary, we're talking about 16% of your take-home income going into this 'investment'
That's a lot. If you do budget to go away somewhere else aswell/instead, that's over 30% of your take-home going towards holidays, from one wage.
Yes, you'll recover some of that but it seems a big exposure in one area.
IMO, holiday homes are for when you've reached a certain level of financial comfort, not for when you're effectively on one wage and still have a decent chunk of your main house to pay off.
TLDR - I think you're a bit mad, but it's your money.
2% per year doesn't sound like much, but there's plenty of people who'll say that there has to be a ceiling/correction at some point
I can see it from both camps and, to be honest, the future value of the property isn't what I'm raising my eyebrows about. Rather, I am concerned that you're dedicating a hefty chunk of your income into this investment and not diversifying.
It may well pay off and you'll be sat smug in Norfolk in 20 years time having made a shrewd choice. You pays your money....
princeperch said:
our current house is worth 600k and I would guess than if we were to go ahead and buy this flat, the outstanding mortgage in 2 years would be about 50k. what is attractive to me is that we could sell this house in 20 years time (lets say its worth I dunno, 850k/900k by then) and simply move into the second property..
You say that you’re looking at buying a flat for up to £150k: I very much doubt whether you’d be happy living in a property worth no more than a quarter of the value of your house once you’ve retired, it would be a massive downgrade even though property prices are obviously much lower in Norfolk than London. You’d want something far nicer. We’re currently looking at buying a holiday home, and have been for a while on and off, but there’s the nagging doubt that we’d feel stuck with it once the novelty had worn off.
I would say think very hard before taking the plunge.
a) You are tied to visiting that particular part of the country for years....The north Norfolk coast is very nice, but you might soon get fed up.
b) Can be a money pit, council tax, insurance, repairs and renewals etc.
c) If you live in a nice house now, would you really fancy downsizing to a smallish flat on retirement, where it can be pretty bleak in winter?
Not saying don't do it, just think of the downsides.
a) You are tied to visiting that particular part of the country for years....The north Norfolk coast is very nice, but you might soon get fed up.
b) Can be a money pit, council tax, insurance, repairs and renewals etc.
c) If you live in a nice house now, would you really fancy downsizing to a smallish flat on retirement, where it can be pretty bleak in winter?
Not saying don't do it, just think of the downsides.
Another option is to buy a caravan. We have a 10 month old and plan to have more children. Took the 10 month old abroad to Portugal, Italy and Spain already but feel like it was a bit wasted on her.
So 2 weeks ago I sold this:
And 4 days ago picked up this:
Hoping to pick up a caravan in the next couple of weeks. We have a budget of £20k and that will get quite a lot of luxury. You can spend up to £30-35k but £20k is enough for our first caravan.
Wife is still on mat leave and will go back part time. I don’t work Fridays so that means most weekends between March-Oct we are free to go off and enjoy ourselves.
Obviously there’s the upfront cost of the caravan but this is much less than the cost of a second house (we also have a BTL but it’s not a holiday home). We will still go abroad at least once a year but this gives us the freedom to spend much more quality of time together as a growing family.
Appreciate it’s probably not for everything (we might find it’s not for us haha) but worth considering maybe?
It’s a bit of a pipe dream of mine to stick some bikes on the back and go off into the wilderness, get the bbq out every weekend and just forget about the stresses of life. The main advantage over a holiday home is being able to vary where we go, Scotland, Cornwall, France and anywhere else we fancy.
So 2 weeks ago I sold this:
And 4 days ago picked up this:
Hoping to pick up a caravan in the next couple of weeks. We have a budget of £20k and that will get quite a lot of luxury. You can spend up to £30-35k but £20k is enough for our first caravan.
Wife is still on mat leave and will go back part time. I don’t work Fridays so that means most weekends between March-Oct we are free to go off and enjoy ourselves.
Obviously there’s the upfront cost of the caravan but this is much less than the cost of a second house (we also have a BTL but it’s not a holiday home). We will still go abroad at least once a year but this gives us the freedom to spend much more quality of time together as a growing family.
Appreciate it’s probably not for everything (we might find it’s not for us haha) but worth considering maybe?
It’s a bit of a pipe dream of mine to stick some bikes on the back and go off into the wilderness, get the bbq out every weekend and just forget about the stresses of life. The main advantage over a holiday home is being able to vary where we go, Scotland, Cornwall, France and anywhere else we fancy.
Edited by JapanRed on Monday 12th November 21:20
Muzzer79 said:
Camper vans / motor homes are also an option and hold their value well.
Just sold our Motorhome into the trade for 23.5k which we bought new for 30k eight years ago. Been to every corner of England.We have another new one on order which we pick up in Spring.
Fancy going up to Scotland? No problem. Down to Cornwall the next month? Just go.
I personally, would hate to be tied down to going to the same place month after month, but I understand many people are happy with this.
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