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Brits get adventurous and head East

Currency specialist’s HIFX’s Annual Global Property Hot Spots survey reveals trends in where the Brits are buying abroad.

HIFX’s research shows that while France and Spain were for many years the two favourite countries in which to buy property, during 2006 these two ‘old faithfuls’ lost out to a handful of emerging markets such as Bulgaria, Dubai and Cape Verde.

“Owning an overseas property is no longer the preserve of the wealthy and as a result we’re beginning to see the commoditisation of the overseas property markets.  In many cases the emerging markets offer property which is significantly less expensive than the traditional favourites.

As UK property prices have continued to rise dramatically in the UK over the last 12 months, combined with rising interest rates, we’ve seen the overseas property market open up and become accessible to more of the UK population,” says marketing director Mark Bodega. According to HIFX there are a number of reasons why British buyers are becoming more adventurous.

Firstly, property in these emerging markets can be considerably less expensive. For example, some Eastern Bloc countries such as Hungary and Poland still offer excellent value for money despite significant price increases in 2006. Many in the industry expect these bargain opportunities to continue through 2007.

Secondly, HIFX attributes the rise in interest in more far-flung destinations to a shift away from people buying homes purely for their holidays towards more serious property investors. HIFX reports that Brits buying property abroad fall into three distinct categories, which reflect the changes observed in the market.

The Traditionalists
This is still the largest group and covers people who have bought property in France, Spain and other locations close to the UK. These people are mostly buying holiday homes or homes to retire overseas. The close proximity means they can use the home for regular holidays with cheap flights, easily rentable accommodation and a quick escape to the sun. These people also look for a well established expat community to help them feel at home even when they are abroad.

The English Adventurers
These people are more daring and want to go further afield for their holiday home. They don’t mind traveling long distances and also often consider emigrating to their holiday home at some point. The Adventurers are still sun-seekers but in a much more exotic location than the traditionalists.

Hot Spot Investors
This growing group of financially driven people want to buy in places like Germany, China, Romania, Croatia and Hungary which could offer excellent investment returns. These countries also offer buy-to-let opportunities as a large proportion of local populations are renters. However, they should be careful as the ‘fad’ of these countries could disappear just as quickly as they have appeared.

Offshore lenders:
Irish Permanent International
Skipton Guernsey
Offshoreonline.org
HSBC Bank International
Lloyd TSB Offshore
NatWest International
Leeds & Holbeck
Kaupthing, Singer & Friedlander (IOM)
Norwich & Peterborough
Woolwich Guernsey
Royal Bank of Scotland International
Conti Financial Services