Extortionate estate agent fees, pricey moving costs and expensive renovation work – it seems there is nothing that will stop us buying a second home in the sun, not even the over-inflated travel costs to get there.
So eager are we to grab our own little place in the sun that two-thirds of second home owners with property abroad say a rise in travel costs due to green taxes would not affect their travel to an overseas property. This is the finding of a survey carried out by estate agency Savills Research and property rental firm Holiday-Rentals.co.uk.
If anything it seems we are more enthusiastic than ever to buy a second place abroad as Savills estimates that there are currently 425,000 UK-owned overseas properties, with the total value of UK-owned foreign property now worth Â£58 billion.
Director of Savills Research Jacqui Daly says: “Whilst the issue of climate change is an important concern for the majority of second home owners it is not seen as a barrier to travel. In fact there has been a notable increase in the number of British second home owners buying property further afield, with locations such as Dubai, the Far East and the Caribbean emerging as destinations of choice.”
Luckily there still remains a considerable price differential between overseas and UK second homes, which is the key driver behind the blossoming overseas property sales. As a result the majority of UK buyers estimate that they will have a healthy Â£225,000 to fund their next overseas home and most remain optimistic over the long term.
Not surprisingly, old favourites Spain and France have the largest number of UK-owned second homes, at 34 per cent and 23 per cent respectively, although it seems some of us are getting a taste for more exotic locations as buying activity was lower in these two countries over the past 12 months compared with the previous year. However, Spain, France, Portugal, the US and Italy are still our favourites and comprise the top five destinations.
Managing director of Holiday-Rentals.co.uk Greg Grant says: “Investing in overseas property, both for leisure and investment purposes remains a key aspiration for many Britons. Taking regular holidays is also a top consumer spending priority, despite environmental concerns and the credit crunch. As a result, we expect to see continued growth in the holiday home rentals market, both in terms of supply and demand.”
Not surprisingly the main reason most of us want to get away is some fun in the sun as leisure proved the biggest motivation for buying a second home, accounting for 67 per cent of all purchases. Property investors make up the rest of the sample, with 17 per cent buying specifically for fly to let.
“As more owners become aware that there is strong demand for holiday lets and that it is relatively simple to self-manage rentals, privately owned holiday accommodation will become an increasingly important sector of the travel market. In these tighter times, savvy owners will realise that a month’s rental can, if timed well, pay for much of a year’s running costs on a property,” says Grant.
Fly to let investors, however, target locations that are served by low-cost airlines and where there is good rental potential, according to Savills. Many investors have capitalised on the growth in city break tourism and have increasingly bought in cities including New York, Barcelona, London and Paris. Other city break rental destinations growing in popularity include areas of eastern Europe such as Prague, Krakow and Budapest.
Now that travel taxes are set to soar it leaves us wondering how this will affect the future of property investment and those seeking an affordable place in the sun. Picture caption: Would you give this up because of high travel costs? Neither would two-thirds of overseas home owners.