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British Sunseekers Flock Back To Spain And France In Search Of Bargain Holiday Homes

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As property prices fall across Europe, the chance of owning a holiday home abroad may never be better. And with sterling struggling against foreign currencies – touching a six-month low against the euro on Thursday – it may be wise to get moving sooner rather than later. But where are the bargains?

Latest figures suggest that old favourites France and Spain are regaining their popularity with buyers of holiday homes. But the picture is not so positive for investors wanting a sizeable return on their purchases, with some former European hotspots now looking decidedly chilly.

According to overseas mortgage firm Conti, 31 per cent of the enquiries it has received so far this year have been about property in France, while more than a fifth were about Spain. Clare Nessling, director at Conti, says buyers are sticking to areas they know and trust, and turning their backs on more adventurous territories such as Bulgaria, Turkey and Dubai.

Spain is maintaining its popularity with UK holiday home buyers as prices have fallen heavily due to an oversupply of properties on the market. In some cases, prices in the Costa del Sol have plummeted by 40 per cent since the peak in 2006/7.

That means for those who have always dreamed of buying a place in the sun but been put off by the cost, now is the time to take a look.

The glut of properties on the Spanish market has led one UK firm to launch a service specifically to try and find buyers for "distressed" properties, typically repossessions, probate or part-exchanged properties.

The online property company, whitehotproperty.co.uk, is currently marketing around 4,000 distressed properties in the popular tourist destinations with – in some cases – sizeable discounts. In one example, a four-bed, two-bathroom duplex apartment in Torrevieja has been reduced to €118.400 (£102,068), a 27 per cent discount on the original asking price.

Similarly, a three-bedroom villa with a pool in a tourist hotspot such as the Costas can be bought for €400,000. It would have cost around €650,000 at the height of the market three years ago.

Stuart Law, chief executive of international property investment firm Assetz, puts the British homebuyers' continued interest in Spain down to its proximity to the UK, its sunny climate and an abundance of sandy beaches.

The addition of relatively low property prices means Brits are in a good position to buy in Spain – so long as they don't expect investor-grade price rises. With supply outstripping demand, the situation is unattractive to the professional property developer reliant on solid returns over a relatively short period.

Law says: "Spain is a very difficult place to be buying from an investment point of view, particularly if you are keen on covering all of your costs with rent. Oversupply is impacting the rental market and the exchange rate isn't helping.

"If someone has set their mind on a holiday home that they are not going to rent out then Spain is ideal, and the very problem that would cause an issue to an investor is what is helping push prices down. There is massive choice, and also some very good pricing."

However, although Spain may have plenty of appeal, the European continental property market as a whole has not yet recovered. The Netherlands, Denmark, Slovenia and Slovakia have all seen double-digit house price falls over the second quarter of the year.

But the leading horror story is Bulgaria. The former hotspot in the Balkans is now a no-go area for lenders and buyers alike, with its land registry data showing that real estate transactions crashed by 35 per cent year-on-year in the first half of 2009.

Land prices in the previously fashionable Black Sea area fell by an average of 40 per cent in the first eight months of 2009 compared to the same period in 2008, according to the International Real Estate Federation in Bulgaria. All of Bulgaria's major cities and seaside resorts, including Sofia, Varna and Samokov, as well as winter resort Borovets, reported falls in the region of 50 per cent over the same period.

Stuart Law cautions Brits to avoid Bulgaria at all costs. He says: "It's just horrific; where is the bottom of the market? Our question has always been 'why would you bother?' There are so many better places, either closer, nicer or just as cheap. Comparing Spain to Bulgaria... there really isn't any choice. Spain ticks almost every box and is much closer and easier?"

He suggests that if potential holiday homebuyers want to go further afield, they should consider the US, where some bargains can be found. "Anybody who has ever aspired to own a holiday home in Florida and hasn't looked recently is going to be genuinely shocked by what they could get. We've seen Orlando townhouses in prime resorts at €50,000-€70,000."

One reason that many are avoiding Europe at the moment is the state of the pound. Over the past two years there has been unprecedented volatility in the currency markets, with the value of sterling fluctuating by over 30 per cent against the euro. The pound currently buys around €1.1, with many currency analysts predicting that parity will occur very soon.

Stephen Hughes, a director of Foreign Currency Direct, fears that sterling is "collapsing". He argues that currency traders are agreeing on one thing: "sterling is likely to fall fast and far."

With further falls probable, what should existing or potential European homebuyers do to protect themselves? Mark Bodega, a director at currency broker HiFX, recommends that people looking to buy abroad should consider a "forward contact". "This allows you to buy currency now and pay for it later," he explains. "You will need to pay a 10 per cent deposit now and the 90 per cent balance upon the maturity of the contract, but it allows clients to lock into an exchange rate for up to a year."

Julian Cunningham, from international estate agents Knight Frank, advises British sellers on the continent to reduce their asking prices. He says: "The savvy vendor is passing on any currency gain to the potential buyer in the form of a reduced asking price. But without passing on a certain percentage of that gain to the potential purchaser, it makes it a lot more difficult to do the deal."

Holiday home heaven: Why France remains number one

It's not difficult to see why France remains the most popular choice for Brits. Easily accessible by road, rail and air, potential buyers are not solely at the mercy of budget airlines. House prices have remained resilient in France compared to the UK, and mortgage funding is largely more attractive, too.

Nessling says: "In France, lenders have always been a little more cautious. They certainly haven't taken the extreme view that most UK lenders did. Throughout the credit crunch we've still been able to get 100 per cent mortgages in France for loans over €250,000."

More than four-fifths of mortgages in France are fixed and the majority of all new mortgages are fixed for at least one year. This lending strategy is another reason why the French property market is, on the whole, performing better than in Britain.

Despite a period of house-price falls in the country last year, prices in France actually increased by 3.9 per cent in the second quarter of this year, according to the French National Association of Real Estate Agents.

Stuart Law, chief executive of international property investment firm Assetz, agrees that mortgage lenders in France have kept their criteria largely unchanged, arguing that because they lend based on affordability, an unsustainable boom in prices in France has been prevented. He says: "In the South of France prices have barely wobbled as banks do not think they have substantial risk there."

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Stuart Law, chief executive of international property investment firm Assetz, agrees that mortgage lenders in France have kept their criteria largely unchanged, arguing that because they lend based on affordability, an unsustainable boom in prices in France has been prevented. He says: "In the South of France prices have barely wobbled as banks do not think they have substantial risk there."

stuart...you are talking blollox as usual...french do it on a percentage of salary...ie....a multiple.

Riveria prices are falling fast and there are tons for sale. still expensive thought. and dogs in prams are a common site...shocking...specially the 80 year old perma lipsticked bird pushing them.

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Stuart Law cautions Brits to avoid Bulgaria at all costs

the only words ever to come out of Stuart Law's fevered brain that i agree with

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the only words ever to come out of Stuart Law's fevered brain that i agree with

the yalways come out with things like however i wouldnt buy in greece, just a way to reinforce their lie.

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If there's a gram of truth in the predictions of Peak Oil, and we're running out of cheap and easy oil, then within a few years the cost of flights from the UK to southern Spain/France (never mind North America) will destroy the economics of owning distant holiday homes. And homes are (or should) be long term investments.

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As property prices fall across Europe, the chance of owning a holiday home abroad may never be better. And with sterling struggling against foreign currencies – touching a six-month low against the euro on Thursday – it may be wise to get moving sooner rather than later.

Prices are still falling + Sterling is at an all time low against the Euro = Buy quickly

Why? Before prices fall further or stelring recovers? :blink:

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People in Britain seem to forget just how loathed we are in most of these holiday home host states. We're like Yanks but with more of a sense of entitlement to them.

France is the better option.

Spain is a banana republic and just imagine how bad it will get with those corrupt Guarda kunts over the next few years. No thank you sir.

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"Stuart Law cautions Brits to avoid Bulgaria at all costs. He says: "It's just horrific; where is the bottom of the market? Our question has always been 'why would you bother?'"

Facking knob gobbler !!!!

From 2006 :

http://www.hotproperty.co.uk/hotspot/blog/...s_hotspots.html

"Bulgaria also looks set to continue its reign as a lucrative long-term investment, with ski resorts delivering year-round rentals and yields of up to 12 per cent – as much as double those in the coastal resorts, says Law"

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As property prices fall across Europe, the chance of owning a holiday home abroad may never be better. And with sterling struggling against foreign currencies – touching a six-month low against the euro on Thursday – it may be wise to get moving sooner rather than later.

Prices are still falling + Sterling is at an all time low against the Euro = Buy quickly

Why? Before prices fall further or stelring recovers? :blink:

I wondered the same thing. Buying in a falling market while your currency's at the worst exchange rate in history doesn't really seem like a good plan.

I was also interested to discover that France is "easily accessible by road".

Edited by Scunnered

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I think they're trying to attract the same people who start buying into shares after it's apparent there's been a rally, or those who start selling pounds only when they realise the currency has already gone down 14% (or whatever). If you think the pound is likely to fall another 15% then it may be tempting to buy a property in Europe now, as a ) you avoid losing that 15% currency exchange drop b ) the value of the place you buy automatically increases in pound value by 15% . Of course this does not take into account the fact the property price itself may still have further to fall (who knows though it may rise in 5 years time) nor does it allow for a possible recovery in the value of the pound. All a bit of a gamble, and really bad for speculation purposes.

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I think they're trying to attract the same people who start buying into shares after it's apparent there's been a rally, or those who start selling pounds only when they realise the currency has already gone down 14% (or whatever). If you think the pound is likely to fall another 15% then it may be tempting to buy a property in Europe now, as a ) you avoid losing that 15% currency exchange drop b ) the value of the place you buy automatically increases in pound value by 15% . Of course this does not take into account the fact the property price itself may still have further to fall (who knows though it may rise in 5 years time) nor does it allow for a possible recovery in the value of the pound. All a bit of a gamble, and really bad for speculation purposes.

or your mortgage going up 15% on currency.

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I wondered the same thing. Buying in a falling market while your currency's at the worst exchange rate in history doesn't really seem like a good plan.

I was also interested to discover that France is "easily accessible by road".

amphibious-cars-006.jpg

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QUOTE: Replying to British Sunseekers Flock Back To Spain

How many are in a "flock?"

flock.jpg

The problem is that they may be on their way to the slaughterhouse.

post-3600-1253961054_thumb.jpg

Edited by Scunnered

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"Stuart Law cautions Brits to avoid Bulgaria at all costs. He says: "It's just horrific; where is the bottom of the market? Our question has always been 'why would you bother?'"

Facking knob gobbler !!!!

From 2006 :

http://www.hotproperty.co.uk/hotspot/blog/...s_hotspots.html

"Bulgaria also looks set to continue its reign as a lucrative long-term investment, with ski resorts delivering year-round rentals and yields of up to 12 per cent – as much as double those in the coastal resorts, says Law"

Good one. Why on earth do papers keep quoting this waste of space? Quite how is he making worth the jounos while??

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