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UK market tips overseas buyer balance

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The changing winds of the UK housing market are beginning to sweep foreign shores, report estate agents, changing the balance of considerations in the property investment market.

Spendthrift Brits have boosted house prices in several parts of the world in the last few years as rocketing UK home values made holiday home seekers quick to reach for their cheque books.

The effect has been particularly strong in south-western France and Southern Spain, where UK property investors make up as much as 70 - 80 per cent of local holiday home owners.

"I have to say, the UK market is having its effect here," Simon Gough, in the market with £290,000 to spend on a property in the High Languedoc after selling his Berkshire home, told the Times.

"Some of the houses I saw were ridiculously priced, but as soon as I got back to the hotel, the agent was on the phone saying the owner would accept an offer. It seems to me a lot of them were just trying it on, which worked when the UK market was buoyant, but now isn't going to wash."

While the UK housing market has stabilised and is currently offering solid prices, price demands in many of the most popular jet to let and holiday home investment areas of Europe are beginning to slow, offering new opportunities to investors.

There are cautionary tales, however. Earlier this year, John Henley and his wife decided to follow the path of many UK homeowners before them, and sell up for a retirement in the south of France.

Having put their four bed terraced Cheltenham home on the market for £625,000 they found a farmhouse near the south western town of Pau for £280,000. Two months after, they are still seeking a buyer for their Cheltenham home, however.

"I would advise anybody thinking of making the move to do nothing until they have got to contract stage over here first I can't bear to think about the amount of time and money we have wasted," said Mr Henley who has spent an additional £3,000 on legal bills and other expenses.

There remain exceptions to this rule - with 'younger' property markets, such as the Spanish interior and Cyprus, which have not seen the UK fuelled price inflation of recent years, holding their prices.

The top tier of properties have also remained steady, as the owners and investors are less likely to see their capital affected by the UK housing market.

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