Malta ranked UK's 7th most affordable country for luxury second homes

Malta has been ranked the 7th most affordable country for luxury second homes in a report ranking the top 20 popular destinations based on their affordability for UK second-home investors.

The rankings, by Proven Partners, specialists in luxury real estate marketing, comes at a time when UK regions are witnessing significant hikes in property taxes for second homes.

They considered factors like property prices, taxes, fine-dining costs, premium car hire rates, flight costs from the UK, and potential Airbnb revenue.

The study, underpinned by data from 3,600 luxury property listings on JamesEdition and other sources, assigned each country an "affordability score" out of 10.

Malta emerged as a highly attractive destination for luxury second homes, with an affordability score of 8.4.

The average price for a 3-bedroom waterfront luxury property in Malta is €635,994, offering value in a sought-after location with a favourable tax environment.

Malta's appeal is further enhanced by its Mediterranean climate and a short three-hour flight from the UK, with tickets averaging €146 in August.

“Malta presents a unique opportunity for luxury property investment, especially considering the tax situation in the UK,” Colin Hannan, co-CEO at Proven Partners, said.

This study gains relevance against the backdrop of recent announcements in the UK. Regions like Pembrokeshire are imposing a 100% council tax premium on second homes, and Scotland is set to double council tax on such properties.

These measures, aimed at addressing local housing shortages, are significantly increasing the financial burden on second-home owners in the UK.

Co-CEO Ronan Hannan said that as the luxury property market diversifies, Malta is gaining attention for its combination of luxury, affordability, and lifestyle.

“Investors are increasingly exploring options like Malta, which offer a different experience from traditional markets like France and Spain," he said.

Demand on the rise

Since the global pandemic, there's been a noticeable uptick in the demand for luxury second homes, a trend fueled by changing lifestyles and the flexibility of remote work. But with luxury comes the inevitable question of cost. How does one strike a balance between indulgence and investment? To shed light on this, Proven Partners embarked on this study, aiming to identify the most affordable countries to invest in a luxury waterfront second home for UK investors out of the most yearned-for destinations.

Their approach was twofold: first, they selected countries based on their popularity, as indicated by Google search volumes.

This ensured that the list was not only data-driven but also aligned with current market interests.

Secondly, the study delved deep into various affordability metrics, from property prices to fine dining costs, to paint a holistic picture of value for money in the luxury segment.

For the purposes of the study, “luxury property” was defined to be a three-bed waterfront property listed on a luxury property website.