FOREIGN PROPERTY BOOM LOOMS...

AN estimated six millions Britons are this year looking to either buy a second home or relocate overseas, primarily in Belgium, France and areas of Spain with frequent and regular air links to the UK, such as Majorca which is one of the best served areas of Spain with regards to UK air links. With house prices in the UK still rising, an ever increasing number of “flexible” homeowners are relocating overseas, to destinations with two or two-and-a-half hours flying time from the UK and commuting to work, maintaining a small property with the family home overseas. Low cost airline easyJet has reported that one of its biggest growth markets is the “professional” passengers, by which the airline means commuters and the Palma - UK routes are the ones to have witnessed the biggest growth in this area over the past year. But, while the low-cost airline revolution and the opening up of regional airports in the UK is providing the business sector with new life style options, it is also enabling second-home owners to make more regular use of their overseas pad while at the same time, making owning a home overseas far more attractive. The latest airport figures show that since January, passengers figures have risen by eight per cent and that last month alone, the airport handled nearly 20 per cent more passengers than in April last year. However, hoteliers have complained of a further fall in guests, while both easyJet and BMI Baby have posted healthy increases in passenger figures with the holiday home market proving extremely buoyant. According to the Majorcan hotel federation this week, last year, 49 per cent of visitors to Majorca stayed in private accommodation.
Further good news for foreign house hunters is that property prices should start to level out this year primarily because of a forecast fall in domestic demand, according to a report released this week by the bank BBVA, although on average, house prices will rise by ten per cent. But that is still seven per cent less that the average increase in property prices last year.
The report also states that in some regions, property prices have peaked and the increase in house prices may be as little as five per cent in areas where the bubble has burst and house hunters are starting to enjoy the benefits of a buyer's market. Another factor affecting house prices is a slow down in the construction sector which is expected to grow by 3.6 per cent this year compared to 4.5 per cent last year.