More Britons than ever are buying property abroad and pushing up local house prices as a result. Mike Collins investigates
Britons are exporting their passion for property, with people attracted by cheaper prices, better weather and the prospect of their properties appreciating in value in the coming years.
Birmingham Midshires reports that one in 10 people plans to retire abroad, while Alliance & Leicester predicts that 2.3 million Brits will own property overseas in the next 10 years.
Cheaper house prices on mainland Europe are encouraging equity-rich domestic homeowners to purchase. For example, Britons bought 40% of all new houses built on the Spanish Costas – where the average cost of a house is £87,000 – during 2003, and two-thirds of these are to be holiday or retirement homes.
However, this exodus of Britons to sunnier climes is having an inevitably inflationary effect on local house prices. On the Costas and in the Balearic Islands they are rising at 21% a year, more than three times faster than the ‘traditional’ rate of 6%-7%.
This rate of increase has been paralleled in France, where property prices in the Languedoc Roussillon area increased by 28% in the past year, almost three time’s the national average.
“It’s quite amazing how the country that gave the world football, cricket and warm beer now seems to be giving it good old British rampant house price inflation as well,” says financial adviser Martin Cunningham.
“If the same thing was happening here – with an influx of wealthy foreigners taking the bulk of our properties – there’d be questions in the House and rabid editorials in the Daily Mail on a regular basis. But because it’s us, and the places we’re increasingly going to are foreign, then that makes it all right, apparently.”