Spain number one for Brits buying abroad but emerging markets gain ground

Spain still number one for Brits buying abroad - 2nd October 2008

…but gap is narrowing and emerging markets are stealing a march

Despite all the recent negative reports, Spain still tops the list of most popular destinations for Brits buying property abroad, according to an overseas property ‘hot spots’ report compiled by Conti Financial Services, the UK’s leading overseas mortgage specialist. With France coming a close second, the results prove the enduring attraction of the more established destinations, but the gap is narrowing and new markets like Dubai and Cape Verde are stealing a march on their hot spot rivals.

The report, based on analysis of enquiries received by Conti so far this year, reveals that although Spain and France together account for one in three (29 per cent) of these, interest in both countries has declined slightly since last year. Dubai, on the other hand, is creeping up the table, moving from ninth to seventh place, with a one per cent increase in enquiries. Cape Verde, another emerging market, is also edging quickly into the picture. Although it has not yet made it into the top ten, it’s quickly establishing itself as a contender, accounting for an impressive three per cent of enquiries in the last two months of this year alone.

Whilst the other more established European destinations such as Cyprus, Portugal and Italy are seeing constant or slightly diminishing levels of interest, Germany is bucking the trend, with a three per cent increase in enquiries over the last year. It offers investors an ideal opportunity to benefit from low prices, a stable economy and intensive building projects in Berlin and other cities, following the reunification of east and west. Germany also has a low proportion of owner-occupiers, so its property market offers attractive long-term rental streams from stable tenants with full-time employment.

The USA is the only other country in Conti’s top ten to see an increase in enquiries over the last year, rising from seven per cent to nine per cent. In the face of the credit crunch and a slumping economy, mortgage availability from US banks for foreign nationals has become tighter. Despite this, due to the weak dollar and plummeting property prices, following the sub-prime mortgage crisis, properties across the pond are now more affordable for UK buyers and there are plenty of bargains to be had. It’s no wonder that enquiries are up on last year.

Simon Conn, Sales and Marketing Director at Conti Financial Services, says:
“Spain and France are still leading the pack, albeit with a narrowing margin, and it’s not difficult to see why. Affordable prices, low interest rates, easy access and great weather have all contributed to the attraction of these destinations, but their lead is being weakened as investors turn their attention to emerging markets. The strong euro has also taken its toll.

“Low interest rates and the introduction of new property ownership laws are enabling the property market in Dubai to thrive and this is reflected in the levels of interest it’s experiencing. Cape Verde, billed as the closest Caribbean islands to mainland Europe, and now with direct flights available from the UK, is another rising star.”