Overseas hot spots provide relief from UK housing market gloom

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by Gill Montia

While the UK property market stutters to a halt, overseas investors can still seek out markets with strong growth potential.

In 2008 property inflation is expected to remain high in some Middle Eastern and Asian hotspots and there are also opportunities in the US where house prices continue to fall and the dollar remains weak.

Investors can explore markets that have not traditionally attracted UK buyers, such as Mauritius and Montenegro.

Those wishing to avoid Spain should still consider islands, notably Tenerife and Mallorca.

France remains a magnet to British property investors and price rises of 5% to 8% are predicted during next year.

The country has recently reformed its inheritance tax laws and its popularity as a tourist destination will continue to be enhanced by the new high-speed Eurostar link from St Pancras.

Property experts expect the link to boost the profile of northern France as a second-home destination and Trisha Mason, founder of VEF, the French property specialist, is forecasting property inflation of 20% in Burgundy because the region is now just five hours from London by train.

She also believes UK investors will “be less inclined to take risks, so traditionally strong areas such as the Dordogne and the Languedoc will do well”.

Harry Lewis of Savills is recommending the Caribbean island of Grenada because “it is less developed than Antigua and Barbados so offers better value for money”.

Turkey can also offer exceptional value for money. The country’s “Turquoise” coast has a fast-growing second-home market and Julian Walker of Spot Blue, the Turkish property specialist, expects average price rises of between 10% and 15% for 2008.

The availability of mortgages for UK buyers should improve in 2008 and UK air passenger services will increase in the spring.