Portugal is the 4th best location for the british to retire
Brits want smaller retirement homes, but still prefer Spain
1 Aug 2013
News : Spain is still the number one retirement destination for Brits, despite continuing price falls, according to a new survey.
More people than ever are considering buying abroad than before the economic crisis, but the economic downturn is forcing them to look at smaller properties, according to research from the HSBC bank.
The number of future retirees aged 45-64 thinking of buying an overseas holiday home has risen to 38% (5.4million) in 2013, up from 30% before the financial crisis in August 2006. One in 10 (592,400) say they definitely plan to buy abroad.
Spain heads the list of holiday home destinations at 26.2%, followed by France on 15.5% and Italy with 9.5% - but most would-be buyers prefer not to move abroad permanently.
HSBC spokesman James Thorpe has told OPP Connect, “We need to be conscious that we asked people between 45 and 65 years old, who said they would like to buy abroad in retirement, so the current pricing issues in Spain aren't necessarily the deciding factor for people. They may well believe the prices will have stabilised by the time they come to buy.
“What is telling is that the fluctuations haven't put people off Spain. The combination of predictable weather, multiple departure points, regularity and cost of flights, distance from UK, domestic services (healthcare etc.) and value for money have all maintained Spain as the number one destination.”
Nearly two thirds of those surveyed (62%) would stay in their holiday home abroad for three to six months a year, while 19% would use it up to three months a year.
Even though demand has risen for holiday homes abroad, most potential buyers (55%) say the downturn has no impact on property type or location. Fewer, 29%, say they will now buy a smaller property, 15% will choose a cheaper location and 9% will save on travel costs by looking closer to home. Just 1.3% say they are looking at larger properties.
James Yerkess, HSBC Head of Foreign Exchange, explains, "The economic downturn has had an impact on the income and savings of many but it has also helped lower the price of property in numerous overseas locations.
“Many of the baby-boom generation, who are now approaching retirement, are fortunate enough to remain relatively asset-rich despite recent economic frailties and this has opened up opportunities to take advantage of lower property prices abroad.
"That said, the weakness in many overseas property markets has created some caution among those considering purchasing a property abroad with many saying they would now look to buy smaller properties or homes in less expensive locations."
Two-thirds (66%) are looking for a home on the coast, while 23% prefer the countryside, 6% the mountains and 5% in a large town or city.
On average, buyers would spend £116,846 on the property with the vast majority making the purchase outright, rather than with a mortgage.
Over a third (36%) would use savings to fund the purchase while 24% would downsize in the UK. Just 4.5% are taking a lump sum from their pension and 4% would remortgage their current home.
Most want a one or two-bedroom property, with 36% preferring a one to two-bedroom apartment, 29% want a similar-sized villa and 26% a three to four-bedroom apartment or villa.
Around a quarter (26%) would rent out their property when they were not using it, with 84% using most of their rental income for maintenance and upkeep. Nearly half (49%) would use it to pay local taxes while over a third (36%) want it for additional retirement income.
The top ten destinations for holiday home destinations are: 1 Spain 26.2% 2 France 15.5% 3 Italy 9.5% 4 Portugal 6.7% 5 Greece 6.7% 6 Cyprus 5.2% 7 Caribbean 5.2% 8 Balearic Islands 4.3% 9 Florida 4.0% 10 Turkey 1.9%
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