In 2003 alone, 40 per cent of all dwellings built on the Spanish Costas were bought by the British and of those 63 per cent were bought for holidays or retirement, helping increase prices on the Spanish Costas by 21 per cent year on year. This is triple traditional house price growth of around six to seven per cent.
A similar story is seen in France where in 2003 second home hot spots have seen property prices increase significantly, for example, by 28 per cent in Languedoc Roussillon, which is almost triple the national average house price inflation in 2003 (11.3 per cent).
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 £57 billion due to the rapid growth in UK property prices. Much of this has been used to buy cheaper European property outright. The cost of an average house in France is EUR 124,000 (circa £81,000) and in Costal Spain EUR 130,000 (circa £87,000).
* 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 (variable rates hover around 3 per cent).
To make property buying and settling in France easier for Britons, Barclays today announces the launch of FranceSolutions - a package combing a wide range of assistance and banking services. Barclays is also taking the opportunity to expand its branch network on the Spanish Costas and in the Canary and Balearic islands with 17 new outlets specifically dedicated to the foreign market. This brings Barclays network in Spain with English speaking advisers to over 50 branches. It is also launching a dedicated banking service for foreigners in Spain called Destination Spain that brings together current accounts, mortgages, debit cards and bilingual staff.
David Roberts, chief executive for 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 airfares 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.
"At Barclays we recognise that buying a property in another country can be confusing and people look for reassurance from a trusted name and we now have more services than ever before to help British people buy their own piece of Europe."
