Brits join foreign homes boom

SECOND homes abroad are helping record numbers of Britons to take a rest from the rat race. They are also turning out to be a smart investment, more than doubling in value from £11bn to £23bn during 2004.

Agents are crediting part of the price boom to DIY enthusiasts buying run-down properties and turning them around.

More than 256,600 Britons bought second homes abroad last year, up 46% on 2003 according to the Government's Office of National Statistics. There is also an exodus of families and individuals who are starting a whole new life.

More than 190,000 left the UK to live permanently abroad in 2003, while the figure is thought to have risen sharply last year. They have effectively exported the UK's property boom to Spain and parts of France.

Encouraged by TV programmes such as Channel 4's A Place in the Sun they have bought bargain properties and done them up. Often, these have been run-down farm buildings, which British DIY devotees transform into homes or holiday accommodation for visitors. Rental income from these properties totalled almost £190m last year.

Spain is top of the list for Britons buying a second home, with 69,284 properties, France is second with 51,322 properties, then Portugal with 5,132 and Italy at 2,566.

Almost two thirds of second homes abroad are in Europe, with six per cent in the US and the rest in Australia, New Zealand, Canada, India, Pakistan, South Africa, Sri Lanka and Caribbean islands.

The low cost of borrowing money on the Continent is also an incentive for the boom in Europe, with mortgage rates down around 3%. However, British buyers are vulnerable to currency shifts.

'More people are realising that a life in the sun is viable in terms of living costs, property prices and quality of life,' said Nick Clark, who staged Fresh Start, an exhibition in London offering advice on second homes.

'We have seen a significant increase in the number of people considering moving abroad. You get a lot more value for your money in property while the general cost of living is a lot cheaper.'

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Properties needing refurbishment, but with a good amount of land, can be bought in Spain and France for as little as £50,000-£60,000. For £170,000, it is possible to get a luxury three-bed property with two bathrooms, roof terraces and sea views close to sandy beaches on Spain's Costa Blanca.

A similar budget would buy a home with four bedrooms, three bathrooms, a games room and a heated pool in Orlando, Florida. Many people are turning to second homes as an investment, as well as an opportunity for escape.

The shift has also seen some 300,000 Britons buy second homes in this country, many of them let to cover the mortgage repayments. But with the property price slowdown here, investors are looking abroad. The explosion in the number of low cost airlines, who are flying to more destinations at cheaper prices, is contributing to the foreign homes boom.

Property prices around the continental airports have outpaced the general market, specifically because of the arrival of Britons.