British tourists fire Lanzarote property market

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by Gill Montia

Britons are heading for the Spanish island of Lanzarote in record numbers.

Figures released from the Spanish airport operators, AENA and Cabildo de Lanzarote, show that the number of UK visitors to the resort rose by 8.7% during the first three months of the year.

While an early Easter will have bumped up the numbers, tourism from the UK increased 16.7% during the traditionally quieter months of January and February.

According to ASOLAN, the islands leading hoteliers’ association, the influx is benefiting investors in private rental accommodation, with self-catering apartments achieving occupancy levels of 84.19% during the first two months of 2008.

The surge in tourism is firing the island’s property market, with property portal, Lanzarote Guidebook, reporting over 1,000 enquiries regarding property for sale on the island in the first quarter of this year.

However, prospective overseas investors are being cautious with their cash. The majority were seeking low cost studios and apartments in Lanzarote’s main resorts and 83% of enquiries were for properties costing less than €300,000.

The Spanish mortgage market is becoming increasingly attractive to prospective British investors, as the credit crisis has left UK lenders strapped for cash and lending at high rates.

However, anyone taking out a Spanish mortgage needs to be mindful of the fact that funding a mortgage in euros from an income paid in sterling has its drawbacks at the moment, as the euro shows little sign of falling to pre-credit crunch levels against sterling and the US dollar.