Britons spend £23bn on a place in the sun

Britons spend £23bn on a place in the sun

A huge demand for homes in the sun has seen Britons’ spending on properties overseas increase by 45 per cent in four years.

The number of Britons owning second homes abroad now exceeds a quarter of a million people, at 257,000.

An official report today says British families have invested more than £23 billion in overseas property, with most of that invested in Spain and France although increasing numbers are turning to Canada, the Caribbean and New Zealand.

But people buying villas and apartments have been blamed for soaring house prices in areas of France, Spain and Italy.

Figures released by the Office for National Statistics show that more than a million families in England own a second home, the vast majority of which (72 per cent) are in England, with five per cent in Wales and Scotland, and the remainder overseas.

“In recent years the increasing affordability and accessibility of foreign property markets has contributed to a rise in the number of UK households that own second homes abroad,” the report, Social Trends, says.

“Between 1999-2000 and 2003-4 the number increased by 45 per cent.”

Spain accounted for 27 per cent of all second homes abroad, followed by France at 20 per cent.

But in 2003-4 over a third of all homes owned abroad were outside Europe with almost 154,000 in the United States.

Property ownership was also increasingly common in countries such as Australia, Canada, the Caribbean, India, New Zealand, Pakistan, South Africa and Sri Lanka.

Alex Wright, director of currency specialist HIFX, which assists Britons buying property abroad, said there was strong demand in more adventurous locations.

“Spain and France are still the most popular destinations, but we have seen increased interest for investment property in Bulgaria and Dubai. Even Canada and Switzerland have seen their fortunes rise and new locations pop up all the time, including Egypt, Brazil and central Europe – Poland, Hungary and the Czech Republic.”

The Association of British Travel Agents estimates that home ownership abroad will double over the next five to seven years.

The Spanish Ministry of Tourism predicts that more than one million foreigners will set up home on the Spanish coast in the next six years, a figure expected to treble by 2025.

Sarah Vaughan, a property specialist and director of a public relations firm based in Spain, said estate agents still received inquiries from British people who thought £100,000 would buy them a four-bedroom property on the Costa del Sol.

“Realistically the minimum you can spend is £145,000 for a two-bed apartment, or £210,000 if it is in Marbella.

“The Costa del Sol is going through a bit of a wobble and is not the place to buy if you are looking for a good investment.

“You can still buy places for a song in northern Spain, and inland, but northern Spain tends to be rainy, and without the bars and restaurants, and if you are inland you might not be near the airport, or have a phone connection, or the property might need a lot of work.”

Recent research suggested some young Britons were looking abroad to take their first step on the property ladder because house prices were too high in Britain.

A poll of more than 4,600 adults, conducted by YouGov, found that nearly half of the 18- to 29-year-olds questioned planned to buy abroad, with two thirds of those stating that their foreign investment would be their first property purchase.

More than 80 per cent of those first-time buyers said they would rent out their property.

The new breed of first-time buyers, dubbed the “jet-to-let generation”, said they would spend an average of £101,000 to buy abroad – nearly £80,000 less than the average house price in Britain.

Simon Burgess, a director at Oceanico Developments, a property development company, said: “More than two in five want to live in foreign climes because it’s more affordable than the UK.”

Source: Telegraph