Whether you fall in love with the intricacies of architecture in Barcelona, the cosmopolitan surroundings of Madrid or the beautiful coastal areas of the Costas, Spain continues to be a popular holiday home location for Brits. in fact, Britons are the number one foreign home buyers of property in Spain.
Following the financial crisis of 2007-2008, property prices in Spain fell consecutively for a number of years, only beginning to recover in 2014. 2015 saw a small rise in property prices, why may suggest future stability. Interest rates in Spain are unusually low - according to the European Central Bank in April 2016, the average mortgage rate in Spain stood at just 1.41%.
Therefore, aside from its beautiful cities and landscapes, the cost of buying a holiday home in Spain is still reasonable in comparison to many other locations and the value of your Spanish property may rise over time, provided the Spanish economy continues to grow steadily. As a bonus, flights to destinations across Spain are available from city airports all over the UK, and at a relatively low cost.
“There are thousands of Spanish properties available for under €50k. Nor are they just remote country houses in need of vast repairs. €50k gives you plenty of choice in Spain these days. You can pick up a three bedroom townhouse, a six bedroom country cottage or a city apartment with a shared pool – there are literally thousands of possibilities.” - Martin Dell, director at Kyero.com
France is another long-standing favourite for European holiday home buyers. From its beautiful northern regions, Brittany and Normandy, to wine country, to the Alps, the Pyrenees and the Riviera, France offers holiday home options to suit all budgets and tastes.
Property prices in France tend to be fairly stable in comparison to other European countries. However, unlike the current uplift in Spain, French property prices continue to fall incrementally - even in the wealthiest areas. Construction of new properties in France has fallen to its lowest in over 15 years, so if you're looking to bag a new build, you may be out of luck! However, don't be disheartened; France offers charming doer-uppers, so if you've got the time and budget you may find exactly what you're looking for.
On another positive note, obtaining a mortgage on a property is relatively straightforward and interest rates are currently low. However, if you are hoping to rent out your holiday home, you may want to think carefully as rental yields are very low - even in highly populated areas such as Paris. If your holiday home is in a scenic but remote location you may find it difficult to find occupiers, let alone make any extra money.
“Historically over the last 10 years or so, the French have cottoned on to our love for their country and have developed unrealistic expectations about what we can afford, culminating in over pricing of their properties... This has resulted in too many properties sitting on the market for a year or more, and not selling due to their prices being too high. Over the course of the last year or so, the French have been forced to align prices more in tune with the market and now we’re starting to see them level out.” - France Buying Guide
While Spain and France have traditionally been popular holiday home locations for Brits, Spain’s westerly Iberian neighbour Portugal is another great option for holiday home buyers. The Algarve, a coastal area boasting 280 days of sunshine and easy access from Faro airport, is a firm favourite. However the Estoril coast, to the south of Lisbon, and the northern coast should not be overlooked.
Portugal's housing market, like Spain's, is another one on the up - along with its economy. However, it's still relatively inexpensive and mortgage interest rates are low. According to Global Property Guide research, Portugal has some of the lowest city property prices in Europe.
According to The Guardian, foreigners looking to purchase a holiday home can expect to spend up to €120,000 (£104,000) for a small apartment (twice this for a sea view), and €1m for a family-sized detached villa near a beach.
With fantastic weather, a fascinating ancient history and a tinge of British custom, Cyprus continues to be a popular destination for many British holiday home buyers.
Since 2009, Cyprus' property market has been in decline, only recently beginning evident recovery, reflected in a slight increase in property prices. Rental yields are steadily rising and although Cypruses' economy has not recovered and unemployment is high, it is expected that employment rates will rise and steady economic growth will be seen over the next couple of years.
Popular neighbourhoods include: central Kato Paphos – around the medieval port, where apartments start at around £65,000; the authentic Cypriot villages of Peyia and Tala just outside the town; and the five-star Aphrodite Hills resort nearby. In Peyia there’s a range of affordable properties to choose from – from apartments for £30,000, to three-bed townhouses for a little over £100,000 to five-bed villas for £250,000.
Limassol, on the eastern coast of the island, is a lively area as well as a growing hub for business. Both are factors which have driven starting prices up to £85,000 for apartments and £300,000 for villas.
Alison Wild BCom (Hons), MAAT, ATT, Taxation Technician is a highly respected industry professional who has been working with and advising SMEs in areas including tax, pensions, insurance and marketing for over 25 years. She is a member of the Association of Accounting Technicians (AAT) and Association of Tax Technicians (AAT) and also has considerable experience as a residential landlord.
Date: December 19, 2016