Overseas Property Prices Fall

Cost of overseas homes falls

The cost of buying a property in the popular destinations of the U.S, Spain and France has fallen for UK investors over the past year, making the case for purchasing a second home in these countries more attractive, experts say.

Property prices in Russia have fallen the most, dropping 24% in sterling terms in the 12 months to December 2009, according the research from Knight Frank. But the cost of buying a property was 9% less in the US compared with a year ago, with European countries such as Greece, Spain, France and Italy also seeing declines.

The volatility of the pound over recent years has had a significant impact on UK buyers and their ability to finance overseas purchases, says Liam Bailey of Knight Frank.

The decline of the pound against most of the leading currencies around the world caused prices for UK second-home buyers to soar in the past two years.

But Bailey says the situation has improved for investors looking to buy abroad “It was much more expensive two years ago because the pound had weakened dramatically but, over the last year, sterling has stopped its decline and come up a little bit” he points out.

Ann Wright of Prime-location.com says “Interest in overseas property has shot up in recent months. The encouraging signs of recovery in the UK property market and economy and the resulting upturn in consumer confidence appear to have had a knock-on effect on the overseas market’

FT.com, February 2010