Resicom – Holiday Investment – 04-21 – LB

Europe rises from the ashes

Rising confidence in the European market along with a strengthening pound in relation to the euro has sent many investors towards the overseas property market in the last year, a trend set to continue in the coming months.

Overseas mortgage specialist Conti saw enquiries rise by 24 per cent throughout 2014 in comparison with the year before. Enquiries were clustered during the first half of the year, during which they were up a sizeable 58 per cent, before levelling out in the third quarter, something likely due to the uncertainty in relation to the Scottish referendum.

Goldman Sach’s prediction that sterling will continue to strengthen over the next three years is likely to further influence potential buyers to take the plunge, as will the pension reforms, coming into effect in April 2015. With pensioners turning to buy to let in order to retain a steady income it seems likely that overseas buying will grow.

It has been predicted that Spain will be a huge source of investment in 2015, after accounting for 49 per cent of enquiries at Conti during 2014. Furthermore, the volume of Spanish mortgage enquiries grew by 54 per cent over the last year, suggesting that Spain is finally turning round its previously unfortunate financial situation.

France has also remained a steady favourite, seeing 32 per cent of all enquiries last year. A slow property market has currently kept prices down, and people are keen to sell thus meaning that they are likely to accept offers below asking price. However, buyers are advised to move quickly, as despite previous predictions suggesting a fall in house prices this year, it has now been suggested that there may instead be an increase of 2-3 per cent .

Whilst Conti expects the two aforementioned favourites to remain at the top of the popularity scale due to long term capital appreciation opportunities, other countries are beginning to emerge as ‘ones to watch.

Portugal was amongst the worst hit by the financial crisis, yet now has an increasing number of buyers searching for bargains in the market. Currently third on the list of hotspots, it is expected to perform well in 2015 due to improving lending conditions.

Similarly, Turkey is also increasingly popular. Referred to frequently as ‘the new Spain’ it has a popular and growing tourist industry, coupled with excellent property values and a rising demand for rental properties. With living costs 50-60 per cent lower than the UK, it is growing in popularity as a retirement destination. Whilst it is not part of the EU, the Turkish government is currently easing property ownership rules and it is possible to obtain euro dominated mortgages, meaning that the benefits of a strong pound can still be realised.

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