British overseas property investors are snubbing the EU to look further afield for their dream holiday home.
According to data gathered by Fexco Corporate Payments, British overseas property investors spent 60 per cent more on properties situated outside the EU in the first half of this year compared with the same period in 2016.
Demand was strongest in Thailand, with British property investor spending on Thai property rising 84 per cent on the level seen in the first half of 2017, and a huge 348 per cent on that seen before the Brexit referendum in first six months of 2016.
Thailand’s appeal has also been boosted by low cost airlines such as Jet Airways and Eurowings launching flights from the UK to Bangkok.
By contrast purchases of EU property have risen by barely a third in the last two years according to the data.
The analysis, of more than 1000 property transactions made by UK customers through Fexco Corporate Payments, suggests Britons are eschewing traditional EU favourites such as Spain, France and Portugal for more far-flung destinations where their Pounds go further.
It is not just Thailand that has seen increased spending by British overseas property investors, other countries have also seen big rises in spending on property. The United Arab Emirates saw a rise of 50 per cent in the first half of 2018 when compared to the first six months of 2016 before the EU referendum.
Spending was also up in Australia, proving that the British are certainly prepared to travel a long way for their dream holiday home.
By contrast, British spending on properties in the EU fell by a fifth (21 per cent) between 2016 and 2017, before recovering in the past 12 months.
In the first half of 2018, total spending on EU property was up 39 per cent on its pre-referendum level but the total number of transactions was up just 4 per cent.
Currency exchange rates have not helped, with the pound down 5 per cent against the euro when compared to before the EU referendum.
Head of dealing at Fexco Corporate Payments, David Lamb, explained: ‘Europe’s proximity and familiarity mean it has always been a firm favourite among Britons buying a place in the sun. But the Pound’s continued weakness against the Euro is slowly eroding the appeal of Eurozone properties.’
He continued: ‘While no-one chooses to buy a home abroad based on the exchange rate alone, it is a major factor for anyone spending tens or hundreds of thousands of Pounds. As a result many strategic buyers are now looking beyond the traditional European hotspots to countries which may offer better value.
‘With the prospect of a hard Brexit looming ever larger, the Pound is likely to remain under pressure in coming months – so anyone planning to invest abroad should consider a currency hedging strategy to ensure they will be protected if sterling falls further.’
It seems that the British love affair with EU property isn’t over yet, but we are starting to play the field and stretch our horizons.