Property bargain hunters from the UK are taking advantage of low prices in popular overseas holiday home locations with real estate searches and mortgage applications increasing, it is claimed.
European banks have not suffered as much from the sub-prime crisis as UK mortgage lenders and overseas mortgage providers have money to lend to foreign investors, according to mortgage broker Conti Financial Services, which specialises in overseas mortgages.
March was its busiest month for over a year with mortgage applications increasing by 48% compared with the previous monthly average. ‘Falling property prices across many European destinations, in some instances by as much as 50%, mean that the chance of owning a place in the sun may never be better and historically low interest rates mean it’s become even more affordable for British buyers,’ said Clare Nessling, Conti’s operations director.
‘The most popular destinations amongst our clients are still France and Spain, both of which come with easy access and good rental opportunities. Turkey is also popular, as it offers some great property prices and all the benefits of its Mediterranean location, minus the effects of the strong Euro,’ she added.
Bargain hunters out in force in Spain where an oversupply of properties and fears about planning permission have left the banks holding repossessed properties which are being sold off. ‘Confidence is definitely growing, but there’s also an element of buyers snapping up bargains in traditional hotspots while they have the chance,’ explained Nessling.
The firm has found that British investors buying second homes in Europe are taking out euro-denominated mortgages. But it warns clients to be aware that if the pound, which has recently strengthened against the euro, falls monthly repayments will go up unless they are able to let the property in euros to cover the outgoings.
Rightmove Overseas has seen a big increase in searches for property in Europe with the Alentejo in Portugal up 28%, Costa Calida in Spain up 13% and an increase of nearly 13% for properties in Italy. Its March market report shows that searches have increased 60% compared with the same time last year.
Primelocation.com has seen a rise in searches for international property of 72% between February 2009 and 2010, with France recording the biggest annual rise of 113%. Spain remained the most popular country, accounting for 32% of all searches followed by 29% for France.
Savills’ office in Sotogrande, Andalucia, also said there had been a rise in inquiries from British buyers, even if many were still reluctant to commit to a purchase.
Unique Living which specialises in upmarket properties in prime locations in Europe such as the French Riviera, Provence, Algarve, Costa del Sol, Mallorca, Ibiza and Southern Cyprus, reports that turnover figures for June 2009 to February 2010 outstripped figures for the same period in 2007, previously its most successful year.