A buoyant housing market and stronger pound in the UK, combined with stagnant prices and cheap mortgages in the Eurozone, have fuelled resurgence in Britons buying overseas property in 2014, said Overseas Guides Company.com in December.
“Spain has unsurprisingly taken the lead, nudging France into second place,” said Angelos Koutsoudes, Head of OverseasGuidesCompany.com. “With a jam-packed Autumn Statement last week and considerable economic developments throughout 2014, thoughts now turn to next year – the pension reforms could channel more money towards property purchases, both in the UK and abroad, but the uncertainty that precedes a general election could hold market activity back a bit until after May. We’ll have to wait and see what direction the markets take as a result.”
Here are the OverseasGuidesCompany.com key observations for property and currency markets in 2014, and key indicators for 2015:
2014 – an eventful year for the overseas property industry
2014 has seen an overall hike in interest in overseas property compared with last year. The Overseas Guides Company received 17 per cent more enquiries, in the form of downloads of its Buying Guides, during the first three quarters of this year compared with the same period in 2013 (Q4 details not yet available).
By comparison with historical trends and the first two quarters, enquiries cooled off slightly in the third quarter of 2014, the likely reason being uncertainty in the run-up to the Scottish independence referendum and the potential effects of a ‘Yes’ vote on the UK economy and strength of Sterling.
Spain has cemented its place at the top of the popularity table amongst overseas property buyers, with France in second place. SpainBuyingGuide.com received more downloads of its Spain Buying Guide than France for the first three quarters of 2014. This trend is expected to remain for the fourth quarter. By comparison, in 2013 France generated more enquiries than Spain during each quarter bar the fourth.
Confidence has returned to property markets in Italy and Portugal, where enquiries for the first three quarters of 2014 were up year-on-year by 27 per cent and 38 per cent respectively.
Sterling’s recovery against the euro during the year helped drive British buyers back to popular European markets. After starting the year at circa £1/€1.20 and hitting a low of £1/€1.191 in March, Sterling has climbed to rates upwards of £1/€1.27 in December. The end of September saw it hit a high of £1/€1.28. In real terms, Sterling’s rebound means a €150,000 property is around £6,000 cheaper in December than it was in January to a UK buyer.
2015 – what does the future hold?
Domestic politics are likely to affect British people’s plans to purchase overseas property in 2015. The prospect of the pre-election Budget in March and general election in May next year could affect the UK housing market, economy and strength of Sterling. This could lead to a quieter first half of the year for the overseas market, with it picking up again in the last two quarters, once people are able to plan.
The changes to stamp duty announced in the Autumn Statement, which introduce a graduated system that makes it cheaper to buy property for most people in the UK, should invigorate the bottom half of the UK housing market. This could benefit anyone who depends on the sale of their UK home to fund a move overseas or foreign property purchase.
The UK’s base interest rate is now expected to remain at its historic low into late 2015, and it’s a similar story in the Eurozone, where mortgage rates are at record lows. These conditions are favourable for British buyers, which could be complemented further is Sterling continues to strengthen against the euro.
April 2015 sees the introduction of new pension rules, which will enable those who have retired or are about to retire to take their pension in lumps of cash to spend however they wish, rather than being obliged to buy an annuity. It’s likely some future retirees are planning to use their pension pot – or some of it – to invest in a new home abroad, or perhaps a buy-to-let investment in the UK that serves as an income producing security when they move overseas.
Filed under: http://www.theleader.info/article/45862/
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