December 5, 2025

Should You Buy a Second Home in the UK or Abroad?

Thinking about buying a second home? Whether you’re dreaming of a coastal escape, a sunny retirement base abroad, or a property that can generate rental income, it’s a big decision - and each option comes with its own advantages and challenges. This guide breaks down the key things to consider before choosing between the UK and overseas.
Author
Richard Ginn DipPFS, Financial Planner

Why People Buy Second Homes

Everyone has different motivations:

  • A holiday base for regular breaks
  • A long-term retirement plan
  • A lifestyle upgrade
  • A property investment
  • A place to escape from work pressures

Whatever your reason, it’s important to understand the practical and financial differences between buying in the UK and buying abroad.

Buying in the UK

Why It Works Well

Familiar and straightforward
You understand the legal process, the language, and the property system. That makes buying and managing a UK second home far simpler.

Easy to visit and maintain
Whether you're checking on the property, handling repairs, or preparing for guests, you're never far away.

Strong rental market
Domestic tourism is still thriving. Coastal areas, national parks, and cities often have consistent rental demand. Holiday letting agents can help manage bookings and maintenance.

No currency risk
Your income and expenses stay in pounds, which removes uncertainty.

Challenges

Higher upfront costs
Second homes attract an additional 3% stamp duty surcharge. This can add thousands to the purchase price.

Rising council tax
From April 2025, many councils can charge premium council tax rates on second homes.

British weather
If sunshine is essential for you, the UK may not deliver the lifestyle you want.

Income tax on rentals
Letting out your second home means tax on profits, with different rules for holiday lets and residential lets.

Buying Abroad

Why It Appeals

Better weather
If sun, warmth, and an outdoor lifestyle matter, countries like Spain, Portugal, Greece, and France are a big draw.

Often more affordable
In many regions, you get more space and better property value than you would in the UK.

Lifestyle benefits
Slower pace of life, lower cost of living, new experiences - this is a huge motivation for many long-term buyers.

Strong tourist demand
Holiday hotspots can generate good rental income during peak seasons.

Challenges to Be Aware Of

More complex process
Different languages, legal systems, and tax rules mean you’ll need local solicitors and tax advice - which increases costs.

Distance management
Any issues require local support. You can't just “drop by” like you can in the UK.

Currency fluctuations
If the pound weakens, all your expenses rise - from mortgage payments to utility bills.

Harder to get a mortgage
Foreign lenders often require large deposits (30–40%) and charge higher interest rates.

Time limits in the EU
Post-Brexit, UK citizens can only spend 90 days in every 180 days in most EU countries without a visa.

Tax in two countries
You may face rental tax abroad and in the UK, and capital gains tax when selling.

Popular Overseas Locations

  • Spain - Costa del Sol, Costa Blanca; note: Golden Visa scheme ended April 2025.
  • Portugal - Algarve, strong expat communities.
  • France - A range of rural and coastal options.
  • Greece - Affordable island properties with warm climate.

Key Costs to Consider

UK Second Homes

  • 3% stamp duty surcharge
  • Higher council tax for second homes
  • Maintenance and insurance
  • If letting: tax on rental profits

Overseas Homes

  • Local purchase taxes and legal fees
  • Currency conversion costs
  • Higher insurance for holiday homes
  • Local property taxes and community fees
  • Travel expenses
  • Larger deposits for mortgages

Financing the Purchase

UK Properties

Mortgages are widely available:

  • Typically 15–25% deposit
  • Straightforward application process
  • Some buyers borrow against their main home
  • For rentals, lenders assess expected rental income

Overseas Properties

Financing is trickier:

  • Usually need a lender based in that country
  • Deposits of 30–40%
  • Higher interest rates
  • Additional legal protections may apply

Which Should You Choose?

A UK Second Home Might Suit You If:

  • You value simplicity and familiarity
  • You plan frequent visits
  • Rental income is a priority
  • You want easier management
  • You don't want to worry about exchange rates

A Home Abroad Might Suit You If:

  • Weather and lifestyle are key priorities
  • You’re thinking ahead to retirement abroad
  • You’re comfortable managing a property remotely
  • You don’t mind a more complex buying process
  • You can handle currency fluctuations

Before You Buy Anywhere

  • Visit multiple times, ideally in different seasons
  • Understand all costs - not just the purchase price
  • Research local rental demand
  • Use qualified solicitors/local experts
  • Think about long-term suitability
  • Consider inheritance rules in other countries
  • Check mortgage and buy-to-let requirements

Final Thoughts

Buying a second home can be exciting - but it’s a major decision with long-term implications. The right choice depends on your goals, finances, lifestyle, and how involved you want to be in managing the property.

If you’re considering your next step, speaking to a mortgage adviser with experience working with medical professionals can help you understand the best financing options for your circumstances.

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