Property Investors Are Encouraged to Buy Property Abroad

Nearly half (46%) of property investors are keen to take advantage of the strong pound to buy property abroad, according to new research by FXcompared Intelligence, the research division of money transfer comparison site FXcompared.

The study, commissioned in the aftermath of the Conservatives securing a majority in the recent general election, shows how a combination of financial factors are persuading property investors that now is the time to seek opportunities abroad for higher returns.

Almost a quarter (23%) of respondents are considering buying property abroad in the next 12-18 months due to the stronger economic climate for business and residential lettings in foreign countries, while the Conservatives winning the general election is also a significant factor with one in five (20%) stipulating this as a prime reason.

Easier access to mortgage funding (22%), changes to UK Stamp Duty and property tax (16%), access to pension funds (14%) and better mortgage deals abroad (12%) were noted as key drivers towards foreign property purchases post party election.

The research demonstrates that now is the ideal time to invest in property overseas due to the perfect storm of financial factors that means investors can get the best possible value for money.

Nearly a fifth (19%) are looking to invest in multiple properties at one location, while the same number (19%) think coastal locations offer the best return on investment.

A quarter (25%) are now focusing on bigger properties as they seek to capitalise on the current opportunities in the market especially as a stronger pound has made it more affordable.

Better weather (48%) is still the main lifestyle factor when considering foreign property ownership, but how easy the location of the property is to reach (42%), and finding an up-and-coming area (21%) are also aspects influencing decisions. While investors are looking for value for money, they are also keen to explore locations that offer them the chance to enter the foreign lettings market.

In 50% of cases, currency and exchange rates were either the main factor (16%) or had some influence on the decision (34%) to make an investment.

Daniel Webber, Co-Founder & Managing Director, FXcompared, said: “With unprecedented opportunities for overseas buyers given the low euro, property investors believe they can get more bricks and mortar for their money abroad.

“Over the next 12-18 months we could see a trend among residential and commercial property investors, focusing heavily on major European countries such as Spain, Portugal, Italy and France.

“Aside from the financial reasons for pursuing foreign property ownership, lifestyle choices are still playing a big role too, with better weather and transport links major factors when choosing where to buy investment property.”

In terms of turn-offs, 43% are not interested in investing in countries where there is heavy regulation, while a lack of language skills (23%) and fears over how the property purchasing process (29%) works in certain countries are also causes for concern.