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News: France/Spain stranglehold 'wavering'

Mon, 23 Jul 07

Investment motives are a key driver in the acquisition of an overseas second home, according to the results of a landmark survey carried out by Savills Research and Holiday-Rentals.co.uk...

This was one of the key findings of the survey which questioned 12,000 owners of overseas property who use Holiday-Rentals.co.uk to advertise their properties.

Lucian Cook Director Savills research comments, “Over half of all respondents cited investment as the main reason for purchase with rental potential being the most important financial consideration influencing their purchase.

With this in mind purchasers are increasingly looking further a-field to emerging coastal destinations where entry into the overseas homeownership market currently is more affordable.

This investment into emerging holiday destinations has gone same way towards breaking the stronghold that France and Spain have had over overseas investors. For many it has allowed them to benefit from strong capital growth associated with these developments as more popular and accessible tourist destinations.

Capital growth the ‘key motivator’

Alexis de Belloy, Managing Director Holiday-Rentals.co.uk, adds: “Since 2004, the number of properties listed on Holiday-Rentals.co.uk has increased by over 220%, with a particularly marked increase in emerging tourist destinations such as Bulgaria, Croatia and Morocco.

Provided sufficient research in to the location is carried out, rentals can make a significant contribution towards costs, for example over half of Holiday-Rentals.co.uk clients successfully book at least 17 weeks per year and 86% at least ten weeks.”

Cook again, “The report suggests that some 49% of respondents are funding their acquisitions through mortgages and are exposed to changes in occupancy rates and achievable weekly rental levels. Nonetheless capital growth has played a fundamental part in the viability of these investments”.

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