Leading international money transfer service provider Caxton FX has seen a 20% growth in customers renting properties as second homes in France, as opposed to purchasing them.
The growth highlights that while the British economy is well on the way to recovery, UK consumers are still hesitant when investing large sums into foreign property, particularly France, which has a poor economic outlook with increasing unemployment and slow growth.
Mortgages and homes overseas remain difficult to secure as banks still place restrictions on lending, and, despite prices predicted to fall by 4% in France, many properties still remain overvalued and do not necessarily represent the best deal for the British investor.
James Hickman, managing director of Caxton FX said “Governments around the world are looking at ways to fuel their property markets to encourage not only local growth in the area, but foreign investment. Our data shows that British investors are still hesitant, or at the very least, are holding back from investing in France and are instead turning to renting property as second homes to see what direction foreign markets are heading in.”
Caxton FX’s customer database further backs up this trend with 15% of over 55 year olds looking to rent a property abroad as an international home, rather than just 2% looking to purchase.
Renting a property abroad allows British expats or travellers the chance to still have the luxury of a personal property abroad, without the financial ties and worries should the market they are investing in recede back into a decline.
Other factors which contribute to this trend could be poorly performing international pensions and low interest rates, which sees many investors that are approaching retirement and are interested in living abroad unable to get the mortgages required to purchase a property abroad.