You might think the credit crunch would have put the brake on interest in overseas property but in fact it’s on the up
Does anyone out there remember Eldorado? No, I’m not talking about the mythical lost South American city of gold but the short-lived BBC soap opera set on the Costa Del Wooden Acting that graced our televisions in the early 1990s. Set in an ex-pat community the series featured all the fun of Broadmoor but with added sunshine.
While the programme may have been memorable for its failings it also opened the eyes of many Brits to the possibilities of living or investing in properties overseas.
The subsequent decade saw an explosion in the number of Brits buying properties abroad.
But since then the world has been thrown into economic turmoil. While many households have been tightening their belts in the face of the credit crunch it might seem obvious that interest in the overseas property market would decline.
But it seems this is not the case. Primelocation International’s latest internet search index shows that the number of searches for overseas property increased by some 72% in February compared with the same month in 2009.
In fact, Primelocation’s index indicates that searches reached an all-time high in January 2010 and much of that momentum was carried forward into February.
Implications of the Budget and the election will weed out all but the most serious buyers in the weeks ahead
France saw the biggest leap in searches – up 113% compared with February 2009 – followed by the US, with searches up 103%.
Enthusiasm for Turkey and the United Arab Emirates waned, with the volume of searches for these locations falling by 27% and 22% respectively.
The news that overseas searches are on the up may come as a surprise but with high earners in the UK set to pay the new 50% Income Tax rate, higher National Insurance contributions and some analysts predicting hikes in Capital Gains Tax, maybe this trend is not as surprising as it might seem at first.
Of course, Primelocation says it is expecting the financial implications of the Budget and the impending general election to weed out all but the most serious potential buyers in the weeks ahead.
But while the prevailing political environment may inhibit some short-term sales, underlying factors are still positive for Brits looking to the overseas market.
Indeed, it appears to be the more serious potential buyers who have remained and are more likely to convert their interest into a property purchase.
Investors of all budgets remain cautious and in looking to get the most for their money at the lowest possible risk, a growing number of property seekers are turning to specialist investment firms for guidance.
Firms such as The Resort Group have seen a steady climb in investment interest from the beginning of this year as Brits grow hungry for warm weather after a cruel winter.
Of course, it’s not only those dreaming of an overseas property who have suffered a bleak winter. Brokers too have seen a dramatic fall in business volumes, which means no opportunity should be ignored.
This may not be a market that is suitable for everyone but for brokers who have clients struggling to find suitable UK investment vehicles it could provide some interesting opportunities.