Crunch time for the UK property market as 42% look to buy abroad in next two years
As the credit crunch takes its hold on British shores and the housing market senses an ever-increasing slowdown, more and more people are looking overseas for their property purchase. A new survey by Cater Allen Private Bank, part of the Santander Group who also recently purchased Bradford & Bingley’s branch network, has found that 2.3 million British people are already owners of a property overseas, with over 3 million people likely to buy abroad in the next two years.
With the UK credit crisis tightening its grip, high UK property prices and a worsening lending situation mean that Brits are finding it more and more difficult to purchase real estate in their own country, and are therefore looking elsewhere for both second homes and investment properties. It is this second category, however, that Cater Allen believes will be the most affected by the increasing crisis.
According to the survey, currently around 500,000 (less than 25%) of those buying overseas purchase for investment reasons but they are predicting that within the next two years, this figure will almost double to 42%. According to Steve Dawkins, Managing Director of Real Estate TV, the UK’s dedicated property channel, this is because property is becoming increasingly out of reach to many UK buyers:
“British buyers are becoming increasingly disillusioned with the market here in the UK and this has the knock-on effect of turning their thoughts to buying abroad instead. Overseas bargains become more appealing at times like this and people are beginning to realise that there is investment potential out there, it just may not currently be on their doorstep.”
Of those surveyed who said they were likely to buy abroad in the next two years, those over 45 years are the most likely – with 17% of this age group responding positively. The 18 to 34 age group is also likely to buy property abroad, with 10% of this age group surveyed looking to purchase overseas, spurred on by the problems hindering first time buyers here in the UK. Interestingly, 60% of this 10% will look to buy property purely as an investment showing that it is this age range that most recognises the good profit potential of foreign markets.
The effect of the current UK property market on the amount of people buying property abroad is further highlighted when Cater Allen looked regionally. Here, it was found that those living in London are the most likely to buy real estate overseas – with 10% currently owning such property – an interesting reflection on the effect of residing in the most expensive city in the UK and the third most expensive in the world (according to the Mercer Worldwide Cost of Living Survey 2008).
Given these findings and ever at the forefront of property programming, Real Estate TV are showing Uncharted Territory a series that allows viewers to discover new investment frontiers by taking them to places as far-flung as Romania’s Black Sea Coast, Fez in Morocco, Kerala in India, Placencia in Belize, and Buzios in Brazil. A behind the scenes look at property markets in less well known destinations, Uncharted Territory – presented by Juliet Morris – will help those interested in buying abroad in coming years to uncover a hidden gem of a destination, whether it be for use as a holiday home or for investment purposes.
For those interested specifically in buying overseas for investment – like the 42% uncovered by Cater Allen – Real Estate TV’s Next Big Thing series is essential viewing. Presenter Jo Sinnott visits up-and-coming destinations such as Abu Dhabi, Egypt, Ras al Khaimah and Ajman, Calabria and Cape Verde to look in depth at the reasons why these markets are set for property boom.
Watch Uncharted Territory on Real Estate TV Mondays at 9.30pm and Next Big Thing nightly at 8pm on Sky channels 262 and 263 and on demand at www.realestatetv.tv.