France soars ahead with 45 per cent of enquiries, but Spain on the increase too with 33 per centFrance is still the number one choice for Brits buying property abroad, according to the latest overseas property ‘hot spots’ report compiled by Conti, the overseas mortgage specialist. The country is top of the list for the fourth year running, accounting for a huge 45 cent of mortgage enquiries received so far this year. This is the country’s biggest share achieved to date, and compares with 39 per cent last year, and just 15 per cent back in 2008.
Spain, in second place with 33 per cent of enquiries, is also up from 31 per cent last year and from 14 per cent in 2008, thanks to excellent buying conditions and signs that the market is starting to bottom out. To say that the Spanish property market has experienced a turbulent few years would be a bit of an understatement, but it appears that our affections for this country show no signs of waning.
Portugal, accounting for 10 per cent of enquiries, is in third position for the second year running. Although its share is down by two per cent on last year, interest has picked up again over the last three months as falling property prices entice buyers back.
Interest in Turkey, on the other hand, has declined over the last year with the country now accounting for just six per cent of enquiries, perhaps due to exchange rates working in favour of buyers in the euro zone.
Clare Nessling, Conti’s Operations Director, says:
“Buyers have increasingly been sticking to locations they know and trust, which is why France and Spain are out on their own at the moment, and Portugal is starting to rise in popularity again too. The euro zone crisis continues, but the growing strength of the pound against the euro is boosting the budgets of people in the UK who are looking to buy property in these locations. This together with some bargain property prices and low interest rates, are making it even more affordable. It also helps that these countries offer easy access from the UK, and rental opportunities are good too.”
The lure of la vie Française
Conti says that against the volatility of the British market, French property is seen as an increasingly solid investment option over the long term. It’s also affordable, with rates currently starting from just 2.79 per cent, and mortgage availability is still generally very good. And while French property hasn’t been reduced to bargain basement prices, it generally remains well under UK averages, with plenty to choose from within a budget and the current strength of the pound allowing buyers to get more bang for their buck. As it’s in a relatively secure situation, loan to value ratios are still high and it’s quite normal for clients to borrow up to 70 per cent of the value of a property with an interest-only mortgage and up to 85 per cent with a repayment mortgage.
Bargain prices and the opportunity to negotiate these down even further with some very motivated sellers mean that it’s most certainly a buyer’s market in Spain. This together with historically low interest rates and the weaker euro are making it much more affordable to buy there. And signs that the market is improving are starting to lift the confidence of prospective buyers. Mortgage availability is generally good, despite the negative headlines about the property market, and financial institutions still have a healthy appetite for lending, with maximum loan to values still around 65-70 per cent and rates from just 3.35 per cent.
Portugal becoming more popular
The gloom hanging over Portugal’s economy doesn’t seem to have deterred British buyers, who are being drawn back into the market by falling property prices. Figures from Statistics Portugal (INE) show that the average property price in the country decreased by 8.9 per cent in the year to May 2012, and with prices projected to continue falling for the remainder of the year, and domestic demand remaining weak, buyers should be well placed to pick up a bargain. It’s still possible to borrow up to 70 per cent of the value of a property (although 80 per cent is possible) and rates are very reasonable, starting from just 3.09 per cent.
Conti is the UK's leading overseas mortgage specialist, providing finance for purchasing holiday homes, investment and retirement properties in numerous countries across the globe. All mortgage applications are processed and underwritten by Conti’s team of specialists, who know the exact requirements for each overseas lender. It can also ensure that clients are put in touch with specialists in the country in question, to enable them to comply fully with planning and legal conditions and assist with currency exchange.