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Dailymail - Britons fuel Costa property price rises

Article Date : Friday, June 17, 2005       Bookmark on Facebook   Bookmark on Del   Bookmark on Digg   Bookmark on Facebook   Bookmark on Reddit   Bookmark on Spurl   Bookmark on Furl   Bookmark on Yahoo   Bookmark on Magnolia   Bookmark on StumbleUpon   Bookmark on BlinkList

Britons are fuelling a house price boom in Europe as thousands cash in on soaring UK prices to buy a second property abroad, research showed today. During 2003 around 40% of all new houses built on the Spanish Costas were purchased by British people, with nearly two-thirds buying them as a holiday or retirement home, according to Barclays. The group said this demand contributed to a 21% rise in house prices on the Costas and Balearic islands during the year, triple the traditional price growth of just 6% or 7%. It added that second-homers were having a similar impact on the French market, with prices in the Languedoc Roussillon area, which includes towns such as Montpellier and Nimes, soaring by 28% during 2003, nearly three times the national average of 11.3% for the year. Barclays put the growth in people buying homes abroad down to rising house prices in the UK and the record levels of equity people have been releasing from their properties. During 2003 people unlocked around £57 billion from the value of their homes, and Barclays said much of this was used to buy a property in Europe in cash. The average price of a house in France is just £81,000, while in Spain it is only £87,000. At the same time, Barclays added, the growth in low-cost airlines meant people could travel to an increasing number of destinations cheaply, while historically low interest rates in France and Spain have kept mortgage repayments low for those needing a loan. David Roberts, chief executive of Barclays Private Clients and International, said: "The current housing boom in the UK has given people access to huge chunks of equity from their homes, bringing a second home in Europe, where house prices are cheaper, within the reach of record numbers of British people. "When you add into the equation cheaper air fares to more destinations, and the lowest European interest rates in a generation, it is easy to see how cash rich Britons are driving up property prices."
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