Britain’s first time buyers look abroad

January 24, 2005
Young Britons, priced out of the housing market at home, are looking abroad to take their first steps onto the property ladder, claims a YouGov report.

The poll of more than 4,600 adults, commissioned by Oceanico Developments, found nearly half of the 18- to 29-year-olds questioned planned to buy abroad, with two-thirds of those stating that their foreign investment would be their first property purchase.


The report says the new breed of first-time buyers, dubbed the "jet-to-let generation", will spend an average of £101,000 to buy abroad - nearly £80,000 less than the average house price in Britain of £180,225.


Simon Burgess, director at Oceanico Developments, said: "As property prices in the UK remain prohibitively high and the rental market approaches saturation, it's only natural that first-time buyers look abroad, where their pound travels further, to get themselves on to the property ladder.


"While half want to buy abroad to escape the English weather, financial considerations are high on the motivators list.


"More than two in five want to live in foreign climes because it's more affordable than the UK, and a third recognise that overseas properties are a better investment than the UK."


Spain was the most popular choice for 18- to 29-year-olds who have already bought overseas - or are looking to do so - closely followed by France, Italy, the United States and Portugal.


Many leading mortgage providers do not offer loans on property outside the UK, although buyers could use the high street’s Abbey National before trying an overseas lender.


Despite the new trend, there are significant risks for those who bought abroad, particularly if they were paid in sterling but had a mortgage in a foreign currency.


"You are taking a big currency risk, with sterling against the euro being very volatile over the past year. If the euro weakens, then your investment, if you're trying to get on to the ladder, is being devalued.


“So you could be wiping out all the good that you do. This is extremely bad practice as a way of getting on to the UK property ladder. The best way is still to buy through shared ownership."


At the end of December, the "jet-to-let" market reached a total worth of more than £58 billion, with nearly a fifth who own property abroad renting it out regularly.


Since 1995 the number of Britons who have bought property abroad has risen three-fold, with 550,000 people now owning a home overseas.