Summer 2013 could go down as the turning point for struggling overseas property markets, according to figures from the Overseas Guides Company which reveal a record number of enquiries during July, August and September and highlight soaring interest in homes in classic European destinations.
Demand for information about foreign property rose 30 per cent year-on-year during the third quarter of 2013 and 37.8 per cent during the first three quarters of the year, according to the latest OGC Quarterly Index, which measures interest in destinations popular with second homeowners and expats.
The company says that growth has clearly been driven by classic European hot spots, with France, Spain, Italy and Portugal all recording a 50 per cent year-on-year hike in interest for the year to the end of September. Even Greece’s popularity rose by 23 per cent.
It explains that the reasons for this surge are varied. At home in the UK, there is growing confidence in the economy, as well as consistent upward pressure on house prices. Meanwhile, most of the Eurozone is still very much a buyer’s market, with property prices either at rock bottom or close to it, and mortgage rates at historic lows. The exchange rate edging back in favour of Sterling as the year progresses has also brought more buyers out of the woodwork. Add to this the fact that banks, primarily in Spain and Portugal, have little choice but to offer some very attractive deals on repossessed homes, and things are shaping up nicely for 2014.
This sentiment is echoed by Conti. Our own enquiry figures show that it’s the old favourites which are most popular with British buyers, especially Spain which has accounted for 43 per cent of mortgage enquiries received so far in November alone. Confidence appears to be returning to the market at last. France too is still very popular, with mortgage rates at their lowest in more than 60 years, and affordability being boosted by a slower property market which has been pushing prices down.
The onset of winter often acts as a catalyst for people seeking a little slice of life in the sun, and this year should be no different, especially when you consider the current combination of bargain prices and historically low mortgage rates.
The stronger pound is also boosting affordability. With the value of sterling rising against the euro to as much as €1.20 over recent weeks, up from just €1.14 a few months ago, this difference is quite significant when you translate it into property prices. It means that for someone considering a home worth €200,000, the property now costs £166,666 compared with £175,439 at the start of August. A saving of £8,772, which is pretty good.
As a result, many people who have been sitting on their hands for the last few years are deciding to go for it in case they miss out on the best deals.