For two-thirds of second home owners a rise in travel costs due to green taxes would not impact upon their travel to an overseas property
01 July 2008 For two-thirds of second home owners with property abroad a rise in travel costs due to green taxes would not impact upon their travel to an overseas property, according to the latest results of a survey carried out by Savills Research and Holiday-Rentals.
Savills estimates that there are currently 425,000 UK owned overseas properties, which reflects an increase of 35,000 units during 2007, with the total value of UK owned foreign property now worth £58billion.
Jacqui Daly, Director Savills Research comments, "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 a-field, with locations such as Dubai, the Far East and the Caribbean increasingly emerging as destinations of choice."
There still remains a considerable price differential between overseas and UK second homes, which is a key driver of demand. The majority of UK buyers estimate that they will have about £225,000 to fund their next overseas purchase with buyers remaining optimistic over the long term.
Greg Grant, Managing Director, Holiday-Rentals comments, "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. 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."
Leisure is the key motivation driving second home purchases accounting for 67% of all purchases with investors making up the rest of the sample including 17% buying specifically for fly to let. The ideal holiday location was rated as the most important factor amongst purchasers, which goes some way to explaining the ongoing purchase of property in locations where capital growth slowed or even turned negative last year, such as Spain.
Fly to let investors however, target locations that are served by low cost airlines and where there is good rental potential. 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.