Data compiled for Telegraph Money shows a surge in interest among British buyers looking to buy abroad, driven by the pound’s new strength against the euro.
The euro has weakened against sterling because of fears over quantitative easing, designed to rescue languishing European economies, and a possible standoff between Europe and Greece. All this has pushed the pound to a seven-year high, boosting the spending power of sterling buyers.
Now, 48pc more Britons are searching for property in Spain and Ireland than a year ago, Rightmove data shows. Interest is also up elsewhere. In the United States it has increased by 38pc.
HiFX, a foreign exchange firm, echoed Rightmove’s data, registering a 27pc rise in inquiries from Britons who want to buy property in the eurozone. Buyers shouldn’t delay, experts say, as the pound could weaken as the general election draws closer.
“A hung parliament will inevitably leave markets uncertain as to which political party will govern the country and the pound is likely to weaken,” said Andy Scott of HiFX.
What next for prices?
Property values across Europe are on the rise again, according to figures from Eurostat. The most dramatic increase was in Ireland, which saw 15pc annual price growth towards the end of 2014. Michael Grehan from Irish estate agent Sherry Fitzgerald said there was every reason to expect further increases.
“This will be particularly evident in urban centres where supply is most constrained,” he said, particularly for three and four-bedroom homes.
In the second quarter of last year Spain saw its first growth since 2011, a 0.8pc increase. Murcia, which is in the south-east and popular with British expats, has seen the biggest increase in property searches (75pc more than last year). Currently, the average budget for a British buyer in Spain is £379,000, higher in Barcelona (£556,000) but lower in Lanzarote (£109,000).
Falling mortgage rates
You can borrow at home on rates as low as 1.19pc for a two-year fix. Many may remortgage against a pumped-up UK house price to fulfil foreign ambitions.
Costs abroad are higher – but falling. Europe’s central bank, with its official rate already at 0.05pc, will drive down market rates with its QE plan.
Simon Conn, an overseas broker, said: “British borrowers are increasingly interested in Spain, the Balearics and the Canaries, where interest rates are around 2.75pc and lenders expect a 30pc to 40pc deposit.
