The number of people who own a second home in Great Britain soared to a record level in 2009 with Herefordshire and Shropshire growing in popularity for locations.
A combination of low returns on traditional investments and a growing trend among Britons to holiday at home led to a 2.6 per cent jump in the number of people who owned a new-build second property last year to 245,384.
Estate agent Knight Frank said it expected demand for the properties to continue growing during 2010, and is predicting a further 2 per cent increase in the number who own a holiday property by the end of this year.
It said second home developments had been one of the brightest spots in the new-build market during the recession. The group said growing demand for holiday rentals meant many people were no longer viewing a second home as a luxury but an investment.
The impact of the recession and the weak pound, as well as environmental concerns, have helped to drive the trend for people to take so-called staycations, contributing to a 67 per cent growth in the number of nights spent in self-catering apartments in the UK between 2007 and 2010.
Growth in UK tourism in the past three years expanded beyond the peak summer months to include September and October, as well as Christmas and New Year.
As a result, quality holiday lets now typically offer owners investment yields of between 5 per cent and 7 per cent a year, often higher than the returns available on a buy-to-let property.
At the same time, record low interest rates have reduced the cost of buying a holiday property for those with sufficient cash to put down a large deposit.
Liam Bailey, head of residential research at Knight Frank, said: “The potential investment returns from holiday lets is a huge draw.”