Property seen as a more valuable investment than pension or savings plan

A holiday home is as valuable, if not greater, an investment option as a pension or savings plan, according to an annual survey carried out by holidaylettings.co.uk.

Just over a quarter (26 per cent) of holiday lettings advertisers who completed the company's customer survey said that their primary reason for purchasing a second home was as an investment, instead of a pension or savings account.

Of these people:

• One third purchased the holiday home using a local currency mortgage
• A further 33 per cent bought their second home with cash / savings
• 20 per cent raised the funds needed by remortgaging their UK home

When asked to respond about how their investment is fairing:

• More than half (52 per cent) said their primary reason for letting the property now was out of need to cover the running costs
• 26 per cent are letting the property to make a profit
• 22 per cent opt to let it because they do not use it enough themselves

Kate Stinchcombe-Gillies, spokesperson for holidaylettings.co.uk, said: "In the height of the property boom when the majority of today's holiday home landlords purchased their second homes, property was indeed an attractive long term investment and it is therefore no surprise to see that around a quarter of our customers made that choice.

"What has changed is the increasing need for the property to pay for itself, either to pass time until the market revives and a profitable sale can be made, or to ensure that the home doesn't cost when it was intended to fund a future lifestyle. What these 'accidental landlords' support in the meantime is growing demand for private rental holiday accommodation."

Research results from the Worldwide Property Group reveals a similar theme. The company's latest confidence tracker survey shows that nearly three quarters (72 per cent) of respondents currently believe property to be the best investment, making it easily the most popular choice. In second place was gold, with 16 per cent, while shares trailed in third place with just 11 per cent of the vote.

The survey, which covers several aspects pertaining to the property sector, also revealed that 77 per cent of respondents consider this to be a great time to invest in UK property, with 64 per cent also of the opinion that many overseas property markets represent a great opportunity to invest right now.

Clare Nessling, Conti's operations director, says "These results are all very encouraging when it comes to the overseas property market. Falling property prices, in some cases by up to 50 per cent, the decreasing value of the euro, and historically low interest rates are making it much more affordable to invest in overseas property, so I'm not surprised that so many people are thinking about doing so.

"And it's not just holiday home buyers who are looking abroad. At Conti, we've recently seen more first time buyers opting to purchase property abroad after finding themselves priced out of UK the market. People are either choosing to commute to the UK from areas like Normandy, or are making sure they get a foot on the ladder in another country."