January (2017) data for the Eurozone showed inflation reaching a near four year high of 1.8%, just 0.2% below the European Central Banks 2% target. While this may be a good indicator for the Eurozone economy overall, with lower unemployment rates, it has the potential to affect holiday home owners whose second property is on the continent.
However, exactly how the effect is felt could vary between the various holiday home owners, how they use their property and the terms and conditions of their insurance policy. This is because the main driver for the increase in inflation was due to a sharp increase in energy prices. Core inflation, a measure used by the European Central Bank that excludes energy and unprocessed food prices, remained unchanged at 0.9% for January, whereas there was an 8.1% increase in energy prices in January compared with the year before.
For holiday or second home owners who keep their property heated over the winter this could mean a noticeable increase in the running costs of their property. One of the key features of a holiday home is that it’s not used as often as a main home. Some insurers require that the heating be kept on over the winter to help prevent pipes bursting due to freezing conditions. If this is the case it could mean extra running costs for the property even if it’s not being used. However, other insurers may allow that the water supply at the property is turned off. If this is the case some of the increase in energy prices may be mitigated by taking different action to prevent freezing pipes.
So if you are a second or holiday home owner who closes up their property over the winter it’s worth checking what provisions your insurance policy makes for this period to choose the option that is best going to suit your circumstances. Other than this it’s always a good idea to check the insulation, condition and state of repair of the property, all of which can affect the cost effectiveness of running a second home. To help prevent freezing pipes it’s also a good idea to make sure that pipes at the property are suitably lagged.
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