17th December 2012
Of that number, 45 per cent are in Spain with 26 per cent in France. Many owners are struggling to sell with one third having had their property on sale for more than a year and eight per cent for more than two years.
Nearly three quarters or 72 per cent say the value of their property has decreased over the past year.
There is one bright spot on the horizon at least for new buyers. The strength of the pound means that Eurozone property is five per cent cheaper than it was this time last year.
One fifth unsurprisingly say that the eurozone turmoil and the impact on property prices is one reason why they have decided to sell and move their assets back home.
Mark Bodega, director at HiFX said: “Since the housing bubble burst in 2008, property prices in Spain have fallen by a third, which has had a detrimental effect on the value of second homes. It is no surprise that property owners are fleeing the country as the outlook remains poor, with high levels of unemployment and slow growth.”
The firm says that France remains the nation’s ‘number one’ property hotspot as voted by 23 per cent of UK adults but the firm suggests that the recent tax hikes have not endeared the country to second homeowners. In July, the French government increased capital gains tax from 19 per cent to 34.5 per cent, while the tax on rental income has now risen from 20 per cent to 35.5 per cent putting a huge strain on household budgets. Since these tax hikes were implemented, 28 per cent of British homeowners have admitted that the cost of ownership of a property abroad is simply becoming too expensive.
Forty-five per cent of British owners blame the glut of properties on the market, a particular problem in Spain, which is suffering from a significant surplus of homes available with 34 per cent saying no-one is buying at the moment.
Mark Bodega adds: “Property demand in the Eurozone is currently very weak, as consumer and investor confidence has been knocked amidst the struggling economy. This is having a huge impact on the thousands of Brits already in the process of trying to sell their property overseas.”
Some 19 per cent of the British claim that they have failed to sell their home as they cannot get the sale price they expected and 72 per cent of second homeowners say their property value has decreased over the past year. Worryingly a number of owners say they can’t afford to see the value of the Euro fall further. They are using a forward contract to lock in the exchange rate on the proceeds of the sale in case the Euro depreciates further which many analysts believe is likely.
Mark Bodega says: “Due to the current uncertainty in the financial markets, most of our clients are playing it safe and we have seen an 11 per cent increase in the number of buyers hedging their currency purchase through the use of one of more forward contracts. In essence, this means that you can buy the currency now, and pay for it later. If the exchange rate moves at all in that period this will not affect you at all, as you have bought currency at the originally agreed rate.
“This movement is not surprising particularly as Sterling has performed strongly in recent months, in part due to the less unstable picture here, fall in UK unemployment figures and predictions that we will see growth return to the UK.”
The survey was conducted in September and October and 512 people took part.