Andalucia rose 15.9% in 2003
Not content with a house price boom of their own, thousands of Britons each year are taking advantage of rising property prices in the UK to fuel a property boom in Europe according to research conducted by Barclays.
During 2003 around 40% of all new houses built on the Spanish Costas were purchased by British people, with nearly two-thirds buying them as a holiday or retirement home, according to Barclays. The group said this demand contributed to a 21% rise in house prices on the Costas and Balearic islands during the year, triple the traditional price growth of just 6% or 7%.
Barclays puts the growth of property prices down to a number of factors:
Equity release has reached record levels in the UK in 2003 at around £57bn due to the rapid growth in UK property prices. Much of this has been used to buy cheaper European property outright.
Low cost airlines are flying to more and more destinations and fierce competition is keeping the costs down as mainstream airlines offer competitive deals alongside low cost carriers.
Interest rates in Europe are also at historically low levels and even cheaper than in the UK – this means mortgages in France and Spain have never been better value.
During 2003 people unlocked around £57 billion from the value of their homes, and Barclays said much of this was used to buy a property in Europe in cash. David Roberts, chief executive of Barclays Private Clients and International, said: "The current housing boom in the UK has given people access to huge chunks of equity from their homes, bringing a second home in Europe, where house prices are cheaper, within the reach of record numbers of British people.
"When you add into the equation cheaper air fares to more destinations, and the lowest European interest rates in a generation, it is easy to see how cash rich Britons are driving up property prices."