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Overseas keeps alive

29th December 2008 | back to article listings BACK    print this article PRINT

To hear the predictions of some commentators, it may appear as if many Britons are barely going to stretch their budget beyond eating during 2009. Lower consumer spending is expected across the board as the hatches are battened down in readiness for the squalls of recession that will sweep like an ever colder and stronger wind through the year ahead.

But while it may be true that for those losing jobs at Woolworths or other failing businesses the need to cut back drastically is apparent, it may be appropriate to look carefully at exactly what items most consumers really will cut back on.

For example, research by Thompson and First Choice recently found that foreign holidays are far from the top of the list, parent company TUI Travel has noted. This study found that 88 per cent of consumers would rather make economies elsewhere than forsake their annual break in the sun or tastes of a different culture.

Thomson and First Choice customer director Tim Williamson listed a wide number of locations that will still be favoured next year, varying from traditional short-haul favourites in southern Europe to far-flung places across the Atlantic, including Florida.

For property investors, this is a matter of high significance, particularly for those who invest in holiday rental property. If a consequence of the credit crunch was the British public switching in large numbers from the Costas, the French Riviera and Cyprus to north Wales or Blackpool then such investors could find business thin on the ground. However, as long as such tourists decide they will keep their passports busy this will not be so. TUI Travel hinted that the next few months may particularly benefit from the coldest UK weather seen in the first part of December since 1976.

Of course, there are other considerations for those investing overseas, such as the recent falls in the value of sterling. With the pound dropping from near $2 to under $1.50 and nearing parity with the euro, the situation here may seem bleaker.

However, this is not likely to persist, it was suggested earlier this month. Chief economist at foreign exchange brokerage World First Jeremy Cook said: "The overall feeling for 2009 is that there will be a pull back from the edge of a stronger sterling," with the UK currency gaining in value against both the euro and the dollar.

So while some may see the present as no time for optimism, it could just be that the overseas property market will deal better with the recession than some expect.

This is a press release by Assetz also available at http://press.assetz.co.uk/articles/4559.html. Alternatively, please see our full press release archive.

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