How inheriting a second home became the ultimate embarrassment for millennials

Telegraph

7 days ago

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For generations, Britons have aspired to buy their own piece of the countryside – a second home to provide the backdrop for family holidays year in year out.
But the dream of owning a second home is slowly dying. Data from Hamptons shows the percentage of sales to a second home buyer has fallen from 2pc in 2016 to 0.8pc in 2025 – the lowest figure on record.
Buying a second home has never been less of an inviting prospect, not least because successive tax raids have made buying and maintaining one increasingly unaffordable.
For millennials, who are buying later, and 'maxing themselves out more than previous generations', buying a second home is all but impossible, says Aneisha Beveridge, of Hamptons.
'This limits their ability to withdraw money from their main residence to purchase a second home, or indeed save up enough money on the side,' she says. 'Likely, money which was enjoyed or invested by previous generations at the same point will be tied up for longer by millennials' and Gen Z's mortgage bills.'
According to lawyers and wealth managers, it seems no one particularly wants to inherit a second home either.
'We do see an increased resistance to inheriting real estate and a preference for cash gifts,' says Natasha Southam, of law firm Seddons GSC. 'Owning numerous properties can be seen as burdensome and prohibitive to a mobile lifestyle, which is often a priority.'
Younger generations are also embarrassed at the idea of owning a holiday home, says Mark Wood, of Everest Funeral Concierge and former chief executive of Prudential, who is accustomed to helping families with end-of-life planning.
Many fear they may be accused of hollowing out communities by hoovering up housing stock and inflating house prices.
'I remember the local antagonism in Wales years ago when people would vandalise properties. There is a similar anxiety among younger generations,' Mr Wood adds. 'Do they really want to be the ones turning up in their estate car and unloading stuff from a central London branch of Waitrose?'
The millennials who stand to inherit such homes often grew up in the age of low cost airlines and a social media-driven desire to see as much of the world as possible.
'If you can go to Lisbon for £15, why would you want to spend four hours driving to Devon?' adds Mr Wood.
The twilight years of baby boomers will mark one of the biggest wealth transfers between generations in centuries, Ms Southam says. Baby boomers account for £2.89 trillion in housing wealth alone, Savills data shows, and the lion's share of that wealth will likely be passed to their descendants.
But consensus among experts is that inheriting a second home is more hassle than it's worth.
'A lot of people underestimate the admin burden of inheriting a second home,' says Sam Grice, of Octopus Legacy, a succession planning firm. 'You've got the general upkeep of the property, and they might have to continue paying a mortgage.'
Anyone inheriting a second home will also have to navigate a potentially eye-watering inheritance tax bill and, following changes brought in this year, pay twice the rate of council tax.
Inheriting a second home also comes with a sting in the tail for would-be first-time buyers, who have been kept on the rental market by surging house prices. Indeed, the average age of a first-time buyer has crept up from 30 to 34 since 1980, according to Hamptons data.
Chancellor Rachel Reeves raised the stamp duty surcharge from 3pc to 5pc for second home purchases, a move seemingly aimed at giving first-time buyers an edge on landlords.
'But let's say you're renting in London, and you inherit a third of a Cornish home. If you then go and buy your own property, you'll have to pay an extra 5pc in stamp duty,' says James Ward, of law firm Kingsley Napley.
'I often suggest that people don't give property to children until they've bought their own home.'
In addition, arguments can erupt between siblings – where there is a disagreement as to how to share a holiday home, or even if any of them want it in the first place.
'We tend to draft ownership agreements between families, but it's a liquid asset. What happens if someone wants to take the money out?' says Mr Ward.
Mr Wood, of Everest Funeral Concierge, adds: 'Unless siblings are close and have a lot of money, it leads to disputes – what weeks you take, who is allowed to use it and who pays for repairs. It's a constant battlefield.'
Sometimes it is the parents who are pushing for children to inherit properties they are, at best, agnostic about.
'They become the backdrop for family holidays and memories,' says Mr Wood. 'People want these places passed down because they represent childhood, and they want their grandchildren to have the same experiences.'
There is also some evidence that Labour's war on second home owners is working as intended.
Jennie Hancock, of West Sussex buying agency Property Acquisitions, says second homes forced on to the market by tax changes are indeed being snapped up by downsizers.
'The lack of suitable properties to move to has been a major deterrent for downsizers in recent years, but as second home owners sell up, downsizers are finally seeing the opportunity to make their move,' she says.
In any case, boomers whose pensions will soon be subject to inheritance tax following Ms Reeves's maiden Budget are increasingly seeing second homes as blows to be softened.
'We are seeing more people with second homes taking out equity releases as part of their inheritance tax planning,' says Adam Canavan, of Bowmore Wealth Group.
'The same rules apply to second homes in Europe, but rather than just releasing equity, we are also seeing people sell those properties altogether. In both cases, the goal is the same – to reduce the value of the taxable estate and ultimately pass more wealth on to their family.'