Brits looking for a second home have shown a preference for Spanish holiday spots in the past, but now wealthy home shoppers are setting their sights on France, according to new research by Savills International. Buyers who took the survey said they feel the market is more stable and the properties are easily accessible for purchase. More than half also said renting their vacation properties helped defray costs, while one-third covered their costs and 13% even make a profit from renting. Favored holiday rental destinations include Italy, Portugal, Spain, France the UK and the United States, with 80% of requests occurring between April and September. For more on this continue reading the following article from Property Wire.
France has replaced Spain as the favourite destination for second home owners to buy, according to research published today (Monday September 26) by Savills International and HomeAway.co.uk.
France’s property market is seen as stable, not to have suffered much house price decline and is regarded as easy to access and as a safe place to buy, the survey found.
It also found that traditional prime property hotspots which attract wealthy, lifestyle buyers have been more resilient to the downturn. They include selected areas of southern France, the Alps, Portugal’s Algarve region, Italy and high end locations in Spanish islands such as Mallorca. Cash rich, high spend buyers have maintained the robust property values achieved in top holiday home destinations today.
When choosing where to invest, UK buyers are most influenced by factors such as proximity to restaurants and bars, beaches, and being in easy reach of airports to reduce travel time. Most buyers have bought in destinations with extensive tourism infrastructure including cultural and historical attractions, golf courses, beaches and children’s entertainment.
In France, Italy and Switzerland, buyers have typically opted for older, traditional style properties, while in the US and Cyprus, and also albeit to a lesser extent in Spain and Portugal, investors have tended to buy more modern properties. This reflects the volume of new build development in these locations.
Holiday home owners like outdoor living, reflected in their preference for balconies and terraces with their properties. Buyers like the modern conveniences of their primary home to be available in their holiday homes. Internet connection is on the rise, particularly in long haul destinations. Air conditioning is in half of properties and 80% of home owners have access to either a private or shared swimming pool.
More than half, 55%, of the survey respondents said that income generated from letting their property partially covered costs, helping them to mitigate against current global economic conditions.
Almost a third of respondents said that rental income completely covered their costs and 13% indicated it made them a comfortable profit. Over one in 20 holiday homes generated in excess of £30,000 per annum.
For those seeking to rent a holiday home, Spain, France, the UK, Italy, Portugal and the United States topped the list of favourite destinations. They were followed by areas in south eastern Europe, Cyprus, Greece and Turkey, with Ireland in tenth place. These are typically summer destinations, with almost 80% of holiday rental requests being for the months April to September, with peaks in July and August.
In areas where prices are thought to have bottomed out, most notably in selected US locations, investors are now looking at high yield potential and capital appreciation opportunities that will come with recovery.
There are investment opportunities where low house prices and high rental income can generate strong yield potential, especially in areas of the Caribbean, such as the British Virgin Isles and parts of the US, South Africa, the Spanish islands and in Portugal’s Algarve region.
‘Clearly, holiday home owners and tourists share similar preferences for overseas properties. Strong underlying lifestyle demand for a property helps to support an investment case. It is these fundamentals that drive longer term capital appreciation and attract rental income,’ said Rebecca Gill, research analyst at Savills International and the author of the report.
This article was republished with permission from Property Wire.