Brits continue to prefer Spain and France as a location for buying a second home
Spain and France are still the top destinations for British people buying a second home abroad with two reports placing them above the next most popular location, the United States.
Some 21.01% of searches for overseas property were for Spain, according to the latest monthly report from Rightmove Overseas, followed by 17.91% for France and 12.06% for the US.
France tops the Property Hotspots Report from currency specialists HiFX with over a third, 35%, of buyers looking to own a property across the Channel, followed by Spain with 16%, both way ahead of the US at 8%.
‘France remains a safe bet for Brits. It goes without saying that the sun and lifestyle are a big pull but buyers are now also able to get better value for their money and take advantage of the weakening euro,’ said Mark Bodega, director at HiFX.
‘Spain continues to attract Brits who are hoping to take advantage of depressed property prices. The average property price in the country is down almost 30% since the market peaked in 2007,’ he added.
Traditional locations in Spain such as such as Benidorm, Villamartin and Torrevieja have all seen an upsurge in interest, according to Rightmove Overseas.
‘This is probably down to the fact that British people like to look for property where they holiday. Other European destinations, such Brittany in France have also seen increased levels of property interest,’ said Shameem Golamy, head of Rightmove Overseas.
Charles Purdy, managing director of Smart Currency Exchange said that with Sterling continuing to hold above the €1.20/Ł1 level it is no surprise there is increased interest in buying in the eurozone.
Indeed the middle of April saw Sterling hit a 19 month high to make it worth €1.217. The last time sterling had such strength against the euro was in September 2010.
‘This is good news for would be overseas property buyers,’ said Stephen Dight, managing director of Mallorca Sotheby’s International Realty.
But he pointed out that the Property Transfer Tax is due an increase from 01 May in the Balearics.
‘The eurozone debt crisis is weighing heavily on the European Central Bank’s and politicians’ shoulders which makes sterling appear to be attractively stable and increase in value. It’s no secret that Spain is one of the countries causing most concern and as a result the government is putting pressure on the autonomous regions to do their bit to address budget issues. For the Balearics, the latest initiative is an increase in ITP or Property Transfer Tax which comes into effect on 01 May. Buyers would do well to push through any transactions prior to that date,’ he explained.
Announced at the end of March with only a month to adjust, the new ITP payment structure places property into price bands. From 01 May the first €300,000 of a resale property will be taxed at 7%, the next €200,000 at 8%, the next €200,000 at 9% and anything in excess of €700,000 at 10%. The previous system applied 7% across the board.
New build homes are exempt from ITP and instead are subject to IVA which has been reduced from 8% to 4% to inject life into the property market. This incentive came into play in the middle of 2011 and has been extended to the end of 2012.