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Second homes fuelled by parents buying for kids

Wednesday, 9 August 2006 12:00 AM

The market for second homes is being fuelled by parents buying properties for their children, new research shows.

So-called 'handout homes' - where a property is bought by one person for the use of another - are an increasingly common trend.

There are currently 327,000 'handout homes' in the UK, with a quarter purchased by parents to house their children while at university, according to the study by Direct Line and the Future Foundation.

The 'university effect', which has grown by 26 per cent since 2000, is expected to continue with as many as 100,000 student-occupied second homes predicted to be in existence by 2010.

They now make up a significant proportion of the overall second homes market, which now numbers 2.6 million properties - up from 2.3 million five years ago.

This represents more than ten per cent of the total number of homes in the UK.

"The continued boom in house prices, the rise in parents buying properties for their children and the growth in tele-working are among the key drivers of the UK's buoyant second properties market," said Direct Line's Andrew Lowe.

By far the biggest category of second homes is buy-to-let properties, which make up 60 per cent of the total.

Properties inherited by non-paying tenants make up the next largest number at 11 per cent, while holiday homes make up nine per cent of the total.

Pied-a-terres comprise two per cent of the total number of second homes, while as many as three per cent are unoccupied.

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