Second home owners in the eurozone releasing equity to pay off UK debts

Holiday home owners are increasingly releasing equity from their overseas property to pay off debt or buy property in the UK. As a result of the strong euro, equity in second homes in the eurozone is increased in value when changed into sterling.

Finance specialist Conti Mortgages Overseas has seen the number of people remortgaging their second home abroad triple in recent months, reports The Financial Times.

"People who have uncumbered properties are taking out the cash to pay off debts in the UK or buy property," said Conti's Simon Conn. "At the moment they are getting a ten per cent increase on what they are bringing back."

As well as the weak pound , the fact that it has become easier to obtain equity release loans for holiday homes in Europe is thought to have influenced the actions of property owners. "There are much better deals around now," said Miranda John from estate agency Savills. "The terms are pretty good and most can borrow at under five per cent."

For those not needing to pay off debts, now is a good time to buy UK property using equity released from homes abroad, John added. "The euro is so strong that when converted into sterling, people will have considerably more buying power than six months ago."

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