Look overseas for extra revenue, suggests Phil Whitehouse, head of The Mortgage Alliance (TMA)
The UK property and mortgage market has certainly worked to keep everyone on their toes in recent years and whilst I’m sure there are many ups and downs still to come, at least recent months have experienced some much needed stability. In terms of UK house prices many commentators are suggesting a relatively flat year with slight increases or decreases depending upon which direction the wind seems to be blowing. But the overwhelming consensus seems to suggest that despite some obvious regional variations the forecast for the current market appears relatively stable.
With so much going on in our own marketplace it’s unsurprising that the overseas property market has taken somewhat of a backseat in the eyes of many intermediaries and their clients. However, it has been highlighted that for those ‘wait and see’ investors who delayed buying property overseas during the recession, a plethora of opportunities now appear to be presenting themselves at discounted prices.
In assessing the overseas market research from Lloyds TSB International shows that average prices in Spain have dropped by 23% since their peak in 2007, while in key tourist destinations, such as Ibiza and Costa Blanca, prices have fallen as much as 40%, which has spurred the Spanish government to appeal to British buyers to return. Similarly in Italy and New Zealand prices have dropped by as much as 25% since 2007.
Additional data from the National Federation of Estate Agents in France shows house prices increased in France in 2010 for the first time since 2007 and research by Germany real estate group, IVG, suggests house prices in Spain may recover sooner than expected and faster than the rest of the economy. So it may indeed be the case that these patient investors, as highlighted, could well be enticed by the shift in market conditions and renewed confidence in some property markets.
The aspiration to own overseas property seems to have always been fairly high in the mind-set of UK consumers but for many this has remained a pipedream rather than a reality. Brits do have a long history of buying abroad and certainly the turn of the millennium saw an explosion of overseas property purchases. Inevitably this slowed in recent years due to worldwide economic problems with many UK households having to tighten their belts resulting in the waning of realistic interest in the overseas property market. But the Lloyds TSB International research appears to substantiate that many Brits still harbour such ambitions but that a lack of confidence in personal finances and property market stability has been holding them back.
Even more newly released research undertaken by the Worldwide Property Group suggests that confidence in both domestic and overseas property continues to ride high with 72% of the opinion that right now is a great time to buy a property in the UK. 77% feel that this is also a good time to make a foreign property acquisition and this represents the first time since the survey began in August 2009 that overseas property has received a higher confidence rating that the UK. 69% indicated that they are currently considering an overseas purchase with the United States still firmly in the number one spot.
In addition to those with overseas living aspirations many are also now realising the benefits of the investment opportunities offered by the overseas property market. This may seem like a market far removed, in more ways than one, from that of traditional mortgage broker but the transition is certainly not as tough or as complex as it may be perceived. Indeed there are many specialist and reputable overseas property firms that appreciate the intermediary market and work in conjunction with it to enable intermediaries to earn good levels of commission whilst providing clients with an additional investment opportunity.
A good mortgage club or network will have such links firmly in place and, as with many alternative income streams stemming from the intermediary market, provide a good starting point for any intermediaries looking to get to know more about this potentially lucrative marketplace.
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