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Young buyers look overseas - 5 December 2006

Both ends of the age spectrum are powering the overseas property market at the moment. In addition to large numbers of over 50s re-entering the mortgage market in order to fund their purchase of property overseas, more first time buyers (FTBs) than ever are looking to the overseas market for their first step on the property ladder.

A combination of the unprecedented level of house prices in the UK, in particular for starter homes, concerns over interest rate rises and the sustainability of price growth in the market are leading many FTBs to consider increasing their equity through investment property overseas before considering buying in the UK. With the average price of UK property now £172,185 and the supply of homes for sale at a two-year low, the UK market shows signs of being ‘very firm’, according to Nationwide Building Society.

Add to this the recent interest rate rise and concerns over the new Co-operative Bank mortgage product offering customers facilities to borrow up to five times their income, and it is no wonder that younger buyers are looking to more accessible foreign markets to begin their property buying journey.

With property in some of the up and coming destinations such as Cape Verde, Turkey and Morocco available for a fraction of the equivalent property anywhere in the UK, and with the huge increase in routes from UK airports, owning a property overseas is far less removed from owning in the UK as it has been previously. In addition, young people are more likely to try to organise working overseas with their companies, and will likely form the vanguard of the new breed of overseas commuters in the future.

This can be set against the backdrop of a recent survey carried out for the BBC World Service, which suggests that most 15-17 year-olds have a well-developed global view, and that free movement between countries is an integral part of their rights. Over 3,000 young people in ten cities across the world took part in the survey for the BBC’s Generation Next season.

Two-thirds of respondents said they would move in an effort to improve their economic conditions. This desire to be mobile shows the aspirations of this age group, and that they are less willing to accept geographical boundaries in pursuit of their goals.

 

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