The global economic downturn is hitting Brits trying to property abroad really hard – with around one in 10 owners looking to sell.
And, despite a strong pound making properties about 5% cheaper in the eurozone than last year, around 33% of properties being sold by Brits have been up for sale for over a year.
Astonishingly, around 8% of Brits trying to sell-up have had their properties up for sale for more than two years.
Unfortunately, the decline in the property market has seen prices fall for around three-quarters of Brits trying to sell their property.
These are among the findings from a new ‘Property Hotspot’ report from currency specialists HiFX.
Prices collapse
Their report highlights that it’s no longer a case of ‘sun, sea and sangria’ for those who bought in Spain.
Almost half of Brits who have a property in Spain are looking to offload and move back to the UK.
They have faced a deepening recession, coupled with a collapse in property prices in recent years – especially in new builds.
A spokesman for the firm said: “After the Spanish house market collapsed in 2008, owners have seen prices drop by around a third.
“This has devalued second homes and it’s no surprise to learn that property owners want to sell because the outlook remains poor with high levels of joblessness and sluggish growth predicted.”
He added: “Unfortunately, demand for property in the eurozone is weak with consumer and investor confidence having been knocked by the struggling economy.”
As the recession continues, it is taking its toll on fed-up Brits who are facing increased mortgage costs, property tax hikes and fears over what may happen in the eurozone.
Property glut
HiFX says 9% of second homeowners want to sell-up and bring their assets back to the UK.
It’s not just in Spain where homeowners are becoming increasingly desperate to sell – those in France are also keen to move back to the UK.
Around 26% want to move and though France remains as the UK’s number property hotspot, the recent tax increases has cost second homeowners dearly.
The French government has recently increased capital gains tax from 19% to 34% and taxes on rental profits have increased from 20% to 35.5%.
For Brits across the Eurozone wanting to sell there is a glut of properties and many say they cannot afford for the euro to lose much more in value with 19% saying they can’t sell up because they can’t get the price needed to cover the original purchase price.
Fairly thin research I am afraid:
“The global economic downturn is hitting Brits trying to property abroad really hard – with around one in 10 owners looking to sell.”
BUT
“Almost half of Brits who have a property in Spain are looking to offload and move back to the UK.”
Having lived in Spain for 12 years, I can confidently state that the 50% figure is MUCH more accurate. I would even suggest that even more WOULD move back if they got a sale at anything like the price they would have been looking at in 2007/2008. The expat areas along the costas have been hit very hard indeed and with few exceptions house prices have taken a hammering in the past five years and many would say there is at least another 10/15% to go. It’s a simple supply and demand discussion.
Will Spain bounce? Absolutely! Will it be in the next 2 or 3 years? I fear not.
The situation in rural France is much worse than the figures suggest. ‘Lifestyle’ property that Brits bought in the late 90s is now being sold off at much less than the purchase price. I sold one last week for €400k … it was on the market for €700k 2 years ago. Owners are now realising that they are going to have to take a big hit if they want to get rid of their over-priced estates. The problem is, of course, that they paid too much in the first place! The French peasants saw them coming a mile away (same goes for the Parisians).
As for British buyers … they are very thin on the ground: all our buyers are from Paris, Belgium or Switzerland.