Negative media, not finance, puts off Brit buyers HOME » NEWS » Negative media, not finance, puts off Brit buyers A string of new research suggests that British buyers still want to buy overseas property but are holding back due to a lack of confidence in the domestic market and concerns about access and finance. According to figures released by UK and overseas portal Primelocation.com, some 58% of people it surveyed are still looking for an overseas holiday home, while Cater Allen Private Bank, part of Banco Santander, said its research suggest over 3m Brits will buy a property abroad within the next two years to escape the poor returns on offer from the UK property market. Earlier this year, overseas property portal RightmoveOverseas.co.uk revealed that despite the credit crunch, in the first half of 2008 it recorded some 10.2m searches for overseas property from potential buyers in the UK – up 26% y-o-y. While over in Ireland, figures released by Google indicate that there were 71,100 registered searches for overseas property through the search engine in June despite the crash Despite the intent to buy abroad, the overseas property industry has been hit hard by the hundreds of thousands of Brits that are choosing not to buy at the moment or that are downgrading their purchase. Primelocation’s research found that 33% of Brits are now reconsidering their finances due to the credit crunch, while 27% are looking for a cheaper property as economic conditions worsen. Of those looking to buy, 59% suggested they are now only planning to spend between £50,000 and £250,000 on their property abroad. “Search numbers have not been affected, essentially because owning a property overseas is still very aspirational, so there remains a lot of interest in seeing what’s available,” explained Justin Figgins, director of Rightmove Overseas. “However, buyers who want to purchase abroad but are reliant on selling their UK property are having to hold out, because they not finding buyers as quickly as they might have done a year ago. Those who do not need to sell their UK property are waiting because of the exchange rate. We’re also speaking to people who have told us that while they’d love to buy a place in Spain now, they feel that prices will still fall, so they want to wait until they feel the market has reached rock bottom, then try to snap up a bargain.” Finding funding As UK house prices fall and sales slow, more Brits are turning to mortgages to finance their purchase overseas. A recent report from Holidaylettings.co.uk found that UK buyers paying cash for their overseas properties has fallen from 80% to just 20% in recent times as mortgage markets across Europe liberalise and investors take advantage of the high-levels of equity in their UK property. Simon Smallwood, business development director of mortgage broker International Private Finance, believes that confidence, rather than a lack of finance, is holding back British buyers. “Banks in the majority of markets aren’t restricting what they are lending, with the exception of the Spanish market, and what we are actually seeing is that the lending criteria in the UK is falling more inline with European standards,” he said. “I think that the sheer volume of negative press in the UK about the lack of mortgages is making potential overseas buyers think that this is the case for overseas as well and it is not. The exchange rate is also having an affect on people as well,” he added. It seems that it is not just finance concerns that are holding back the British buyer. Rising oil prices have hit small airlines hard, raising concerns that accessing an overseas property might be more difficult in the future. Louise Hall, commercial director at Primelocation.com, added: “The credit crunch has had an impact on overseas property and people are on the whole being a lot more cautious about where and what they buy. Factors which weren’t even considered last year are now hugely important, such as how accessible the property is and whether budget airlines will even continue to fly there.” Source: Overseas Property Professional