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The holiday home is going places… - Telegraph.co.uk

Telegraph.co.uk

The holiday home is going places… Telegraph.co.uk, United Kingdom - Jul 18, 2008 The survey of 1500 buyers shows that there has been a surge in purchases of resort properties priced from £70000 to £200000 in countries such as Bulgaria, ...

The holiday home is going places… - Telegraph.co.uk
A typical investment home, which was more likely to be an apartment, is worth £135,000. As with so much in the property world of 2008, it's a case of wait and see.Lifestyle case studyAndrew Hutchison is a typical lifestyle buyer. But this sector is worth a vast £58 billion, according to the Office for National Statistics - a rise of £5 billion in the past year - with the recent growth supported by heavy borrowing. Demographics show there are many more of these to come. Despite oil prices, air travel is predicted to grow, according to almost all government and industry experts, and airports in most emerging "city break" locations are enlarging, he says."Renting does not suffer during a downturn," he points out. Families, in particular, may desert hotels and save money by renting a home." The survey, conducted in the first quarter of 2008, shows that a typical "lifestyle" holiday home used solely or largely by its owners is valued at £220,000. He bought a three-bedroom apartment in the so-called Golf Valley of Andalusía, southern Spain, in 2003 with two simple objectives - "to enjoy the sun and to enjoy playing golf". He bought the property near Wenceslas Square in 2005 with his wife Daniela and son Chris. He wanted to be close to courses (there are three nearby) and in the centre of an established community. In Spain, the Costa del Sol remains the leading choice despite dramatic price falls over the past two years.How do we pay for homes overseas?In 2000 almost 80 per cent of Britons owned their overseas homes outright. It's got an occupancy rate of 55-60 per cent so we're very pleased with how it has gone." The current rental more than covers their mortgage and the Norths plan to sell the flat in four years' time. Most have buy-to-let mortgages - some more than 90 per cent of a property's purchase price - and are heavily reliant on rental income to cover monthly costs.Years of low-cost airline flights and easy mortgage availability have fuelled this trend. My family and friends now use it as and when they like, as do I. So is the foreign holiday-home market the next victim of the double whammy - rising oil prices and severe restrictions on borrowing?The survey's authors believe the market will change, but not collapse. The picture of who buys overseas, and why, has changed dramatically in the past few years: whereas we used to buy a holiday home, now many of us look for an investment. The typical home in this category is valued at £220,000."The second and faster-growing sector is for investors," Daly goes on. Then, they say, they may buy another property in another emerging location.Where do Britons buy?Some 71 per cent of buyers still choose Europe, with Spain and France out in front by a country mile. There are 425,000 British-owned homes overseas, including 35,000 that have been bought in the past year."Buyers fall into two distinct camps," says Savills researcher Jacqui Daly. There are vast numbers of over-50s and over-60s wanting homes overseas, often in traditional areas such as Spain. They are typical of a new breed of British buyer for whom income and potential capital appreciation are more important than sunshine. They have a lot of equity in UK homes, so most won't need to borrow at all." The survey also suggests that few existing owners will sell up in the light of dearer fuel prices. They want a lifestyle property in the sun. They'll see that a month's rental can, if timed well, pay for much of a year's running costs on a home." He believes that those investors with overseas city homes will not lose out. We've used the property a little ourselves but it's primarily an investment. You are here:Telegraph>Property>OverseasContact us | Forgotten your password?