Holiday Home Prices Fall - But we all still want a second home
Further to our previous article, Assetsure have found that the value of Brit owned holiday homes and second homes abroad has fallen by as much as 15% in the last three months. Many of Spain's second home hotspots have seen thousands of pounds wiped of their valuations, with property bordering the Mediterranean the hardest hit.
Second home property prices in Europe have be climbing steadily for the last ten years and these drops are really only going to hit those persons that have purchased within the last 24 months. Worries about interest rates at home have seen many Brits cancel foreign holidays and often second home owners were relying on these people to rent their property to help pay for the mortgage. There has also been substantial over saturation in the market fuelled by over zealous property developers and this has lead to a glut of unsold new developments. Many overseas property developers are now in serious financial difficulty as new build property proves hard to shift even after these price drops, expect some bargains to start appearing on the second home market in coming months
Which ever way you look at it,'pioneer" Brits that have been living abroad for a while are still sitting on substantial equity within their properties and you still get more for your home than you do in the United Kingdom. Spain which has seen the highest gross figures is registering the highest drops and France to is also seeing a reduction in prices. Some of the more' Juvenile' markets are simply coming to a grinding halt. Cadiz in South West Spain has seen prices drop by 15% with parts of Alicante dropping by 3%. These figures are hardly alarming, unless of course you have purchased at the top end of the market and have been a speculator rather than an investor. Brits at Home are wising up to second home property prices and realise that many properties have simply been over valued. Many local property agents in Spain in France are instructing sellers to be realistic, property wherever it is situated will sell if the price is right.
Despite the little hiccup in prices, figures released by the National Audit office this week prove that holiday home ownership has never been so popular, 60% more people own a property abroad than did 5 years ago. This statistics are backed up by a recent survey by Nat West Bank that suggests that owning a second home remains the goal of a substantial proportion of Brits. Many people consider or 'dream" of buying a Holiday home abroad simply as a way of avoiding all the stress and strain of going on holiday.
As many as 1 in 3 Brits travel on Holiday to the same destination each year, often the cost of the trip and accommodation is a concern. Many people are starting to believe that the stress and strain of arranging a family holiday, the volume of baggage that needs to be taken and the frequent poor accommodation and meal standards, ends up turning a much needed family holiday in to an ordeal. On returning from holiday, sitting down and doing the Maths, often reveals that purchasing a second home for holiday purposes can be a viable option. As well as free use of the property, owners can also receive an income from renting to other families and this amount can help offset the mortgage. As with purchasing a holiday cottage in The United Kingdom, owners will also need to carry out due diligence to ensure that any property has rental potential.
Further interesting points in the survey reveal that 6 in 10 people would like to live abroad on a permanent basis when they retire and one fifth would like a second home. As many as 17% of Brits say they intend to leave the United Kingdom within the next 5 years. So for many, the fact that overseas property prices are slipping a little is not off putting, living abroad in a second home remains the dream for many Brits,the price drops are being viewed as an opportunity to be able to buy a property at a more reasonable price.