Rental Demand Soars on Lanzarote

Rental Demand Soars on Lanzarote

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Whilst the credit crunch and property downturn starts to bite in both the UK and Ireland some overseas markets look set to benefit.  As a growing number of residents jump ship to seek a brighter future abroad.  According to recently released research from Lanzarote Guidebook, the leading Lanzarote property portal.

Lanzarote Guidebook´s second quarter review and analysis of the Lanzarote property market has revealed a sharp increase in the number of British and Irish residents planning to relocate to the island.  With long term rental enquiries up by 35% versus the first quarter of this year.

The majority of these would be expats are on the hunt for apartments in Puerto del Carmen – Lanzarote´s most popular holiday resort and the hub of the island’s British and Irish communities.  Who currently account for around 7% of Lanzarote´s total population of 126,000 plus residents.

Whilst rents are on the rise in the UK as the housing market cools they remain low by comparison on Lanzarote. With one bedroom apartments costing from €500 per month (around £400 at current exchange rates).

Factor in cheaper fuel, utility and food bills – as well as non-existent heating costs and it’s easy to see why a growing number of people are viewing relocation as a cost-effective option.

Property prices on the island are also starting to soften.  As mortgage approvals across the province of Las Palmas of which Lanzarote is part fell by 35%
during the first quarter of 2008.  According to Spain´s National Institute of Statistics.

As elsewhere in Europe local banks have effectively driven prices down by tightening their lending criteria and by imposing more realistic valuations on vendors.  As a result, all of the leading estate agents in Lanzarote have reported an increase in the quantity of price reduced property in their portfolios.

This buyers market is still attracting plenty of overseas interest though.  As Lanzarote´s popularity as a holiday destination shows no signs of waning despite the current economic conditions.  With overseas visitor numbers up 5.5% for the first half of 2008.

The majority of prospective investors – over 77% – are on the lookout for property priced below the €300,000 threshold.  With property in Puerto del Carmen remaining the hottest ticket for overseas buyers _ accounting for 41% of all enquires received.