Plans and finances may be on ice, but the British dream of a ‘place in the sun’ has not thawed – despite increased anxiety about possible risks attached, according to new research from Mintel.
Mintel’s exclusive consumer research reveals that as many as 6.5 million Brits, or one in five adults, dream of buying a property as a second home abroad in the future, a level of interest unaltered since 2007. In addition, while holiday homes abroad remain a minority pursuit, the percentage of consumers implacably opposed to the idea has also fallen by 4% over the past two years.
Over the past few years there has been a surge in the use of all-inclusive accommodation and staying with friends or relatives as holidaymakers seek to cut costs and control budgets. Today, around one in 20 overseas holidays are taken by people in their own holiday homes and overseas property ownership has grown by a massive 89% since 2001 – compared to a 19% increase for second homes in the UK. Around 270,000 households in England owned homes abroad in 2007, with industry estimates pointing to around 425,000 UK-owned properties overseas.
While the number of consumers dreaming of buying a second home abroad remains the same, the consumer mood has changed. There is clear evidence that attitudes have become more cautious and consumers have become more risk-averse. Indeed, a quarter (24%) of Brits are concerned about being ‘ripped off’ or about possible legal problems, an increase of 4% since 2007. Belief in the investment value of owning a home abroad has also halved from one in five to just one in ten consumers over the past two years. Drivers include negative publicity in the media regarding illegal developments where developers did not secure building permits, ‘land grab’ problems, stories of bankrupt developers and other property ‘scams’.
Tom Rees, Senior Travel Analyst at Mintel said:
” it seems our love of property abroad has not diminished, and while we have seen an increase in anxieties, this does present opportunities for the industry. Hand holding, expert advice and reassurance will be sought, and those that can create trust will benefit. In particular, the big, reassuring names in both the real estate and travel sectors can build on their brand recognition, meaning that the increased number of keen-but-nervous buyers look first to them for help in negotiating the overseas property maze. “
Meanwhile, it seems when it comes to our ideal location for our place in the sun, Brits prefer to stay close to home. Eight in ten overseas second homes are in Europe, with Spain and France housing half of properties. The US is the largest second home market for Britons buying outside of Europe, with property ownership there by Brits up 880 year on year to reach 10,880 households in 2008. Coastal locations still dominate but there is a rising demand for ever more ‘authentic’ and cheaper locations.
“While Europe and the US remain favourite destinations for Brits buying abroad, currency fluctuations may encourage consumers to look further afield in the short-term. However, Spain will lead the recovery as lifestyle buyers return to quality holiday destinations in Western Europe as consumer confidence returns. “
The Mintel research not only shows that the average age of those interested in purchasing of property abroad is now aged under 35, but also that the amount of consumers believing property abroad is ‘somewhere to spend time when you are retired’ has dropped by 6% over the past two years. As many as a quarter (26%) of 16 to 24 year olds aspire to buying a second home abroad, a number which declines rapidly by the time consumers reach 45 to 54 years old (14%) as reality bites for Britain’s older consumers.
Meanwhile, it seems the future generation of overseas property owners will also be more commercially minded, one in three potential buyers would like to rent out their property, compared with just over one in ten current owners.
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