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The power of film to influence our investment decisions...
The recent boom in the UK’s buy-to-let industry has made it consistently harder to find properties offering big returns in the UK and the market for second homes is drawing to a standstill. Consequently, over 250,000 people have looked abroad for second homes or individual rental properties, according to the Office for National Statistics. Thanks to the recent rise in property prices, the increase in housing equity has increased people’s awareness of the global property market; what once seemed unattainable now seems a possibility.
The Managing Director of the Property Investor and Homebuyer Show North, Nick Clark, said that “people will look at any country where prices are cheap and rising.”
However, it seems that there are other forces at play. A survey by the foreign exchange company, Foreign Exchange Direct, has shown that one fifth of those buying abroad have been influenced by a film or television series. Numbered among the 10 favourite films that have attracted people to the idea of owning property abroad are The Lord of the Rings trilogy, the James Bond films and Captain Corelli’s Mandolin, attracting people to New Zealand, the Caribbean and Cephalonia, respectively. Television shows have inspired people to seek out second homes in France, Ireland and Scotland thanks to the success of programmes such as ‘A Year in Provence’, ‘Ballykissangel’ and ‘Monarch of the Glen’.
Regardless of what has inspired them – be it a film or overseas taxation laws – a substantial portion of these people have taken control of their futures using homeowner or ‘secured’ loans. Ten years ago, supermarkets were simply there to buy produce from and occasionally offered store cards as incentives to their customers. Now, as they have become increasingly bigger business, many major supermarkets have become ‘serious players’ in the financial sector, offering current accounts, credit cards and loans. In response to this rivalry, the major banks have adjusted their approaches accordingly and the result is a financial marketplace where the consumer can reap the benefits of the competition for their custom.
ASDA, for example, offers homeowner loans of anything from £1,000 to £150,000 at an APR of just 9.9%, reflecting the current competition between the financial institutions. RBS has countered with their Further Advance loans strategy that can allow a homeowner to borrow up to 95% of their property’s value. Both companies offer a set of incentives and advantages unique to their products.
A simple way to determine which loans are best for you is to use an online comparison site, such as Beatthatquote.com. These are independent bodies that collate and compare the data between financial institutions and display them in easy-to-read tables.
While the rise in house prices may spell bad news for some, it can help many homeowners to realise their dreams of an overseas property – whether it be as a buy-to-let investment or a second home.
Rates are correct at the time of writing (20/04/08) and may be changed at the discretion of the lender.
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