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Brits abroad

Catherine Deshayes

Research has shown that three million Brits are looking to buy property abroad over the next two years, enticed into the international arena by the slowdown of the British housing market...

The British climate has long been the reason behind emigration decisions. Since the beginning of the credit crunch, it is no longer just the dismal weather causing Brits to flock to sunnier climes; the economic climate is playing a part too...

Brits buying property abroad is nothing new, but the current market situation has made the numbers skyrocket. A new survey by Cater Allen Private Bank, part of the Santander Group who recently purchased Bradford & Bingley's branch network, has found that more than three million are likely to buy abroad in the next two years.

The survey also found that a whopping 2.3 million Brits are already owners of overseas property.

With property prices in the UK still far higher than in many other countries, despite the recent drops, people have been looking abroad for some time. Now, the worsening lending situation means that it has become even harder to buy property in Britain.

Around 500,000 (less than 25 per cent) of those buying property abroad are doing so for investment reasons, and it is widely thought that within the next two years, this figure would almost double, hitting 42 per cent.  

Steve Dawkins, Managing Director of Real Estate TV, the UK's dedicated property channel, said, "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," added Mr Dawkins.

Those living in London are the most likely to buy overseas property. Ten per cent of them already own international property and many more are planning to make a purchase in the next few years.

Retirement abroad is no longer limited to those with very deep pockets. Now, hundreds of thousands move overseas to seek the golden sunshine in which to enjoy their golden years.

Retirees are lured by warm climate, outdoor lifestyle and lower cost of living, which means they can afford a better quality of life than what they could have in the UK, on a UK pension.

Spain and Cyprus remain a popular destination to retire due to the established social communities and high standards of living, and Turkey and Bulgaria are also favoured due to the affordable cost of living.

If you retire abroad, you can continue to claim your UK pension, but you will only receive the yearly increases if you are living in a European Economic Area (EEA) country or one of the other countries that have a special agreement with the UK.

Increasing number of pre-retirement age and the middle aged are buying overseas property (villa or apartment) in the hope to use it as a permanent or semi-permanent home in their forthcoming retirement.

At the other end of the spectrum, as far back as 2000, first time property buyers in the UK had been priced out of the market, and were looking abroad. In 2005, three out of four property investors were looking overseas for their property purchase.

One third of property investors looking overseas are considering tapping emerging markets in the likes of North Cyprus, Turkey and the eastern eight with the remaining two thirds still favouring the tried and tested markets in Spain, France, Florida, Greece, Cyprus, Portugal and even Italy. Two thirds of all foreign property owned by Brits is in Europe.

Even if the economic situation in Britain starts to improve, it is doubtful that the lure of a life in the sun will ever diminish.

Picture by patapat