The Overseas House That Came Crashing Down
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by: Coral Bay
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Word Count: 728
Getting a holiday home in Spain, France or Cyprus for many people from the 1980's onwards seemed to make a lot of sense - it was a new appreciating asset that would bring not just revenue but happiness too as they holidayed in their own home, which friends and family used too, as well as unknowns who paid rental fees.
Mortgages for two decades were easy to get at home, and a whole new mortgage industry gew up in Spain, Cyprus and France, where British banks opened branches to lend money for overseas home purchases, and to service those who had moved full time abroad.
Rental income for the new home owners abroad came relatively easy, with a choice of letting a specialist villa holiday company advertise and organise the bookings in return for a share of the rental revenues, or letting out privately and maximising the profit from the new asset.
And in most areas where people bought second homes their property has risen in value, just as their house has increased in value back home in the United Kingdom, Scandanavia and Germany.
In recent years low cost airlines have started to fly to smaller regional airports in France and Spain, opening up new areas where people could buy a holiday home. The properties in these areas have often been cheaper than already discovered and established regions, allowing many more people to gain access to the property ladder abroad.
And established areas that were already favourite destinations for German and British second home buyers saw an increase in the number of airlines flying there. Islands like Cyprus experienced more airlines delivering lower fares and more of a choice of flight arival and departure times from both major and regional airports, again allowing overseas property owners to enjoy their property themselves and rent out to holidaymakers.
Cyprus has long been known as an excellent destination for tourists and subsequently holiday home owners. Its golf courses are renowned around the globe, and its beaches are legendary. The island sits between three continents, which gives it a unique and varied history.
Cyprus is currently home to three championship golf courses. The Aphrodite Hills Golf Club is a short drive from the Paphos-Limassol motorway and overlooks the legendary birthplace of Aphrodite. The Secret Valley Golf Club is also located near the birthplace of Aphrodite, Petra tou Romiou. The valley's beautifully landscaped gardens help bring out the beauty of the natural rock formations. The Tsada Golf Club is on the grounds of a magnificent 12th century monastery near Tsada village in Cyprus
Many of the overseas home buyers bought their property with a twenty or thirty per cent deposit and the balance on a mortgage. While the good times provided plenty of holidaymakers renting, the economic downturn has proved to be more difficult, and instead of producing a profit after the mortgage is paid each month their asset is costing real money.
The double whammy for overseas home owners - a second home that is costing money to maintain, and their aset losing value. And if it's decided to put the property on the market it can takes years to sell in the present economic climate. If the property was bought in the last few years often it will be worth less than the price paid for it.
Those worst affected are the buyers who opted to purchase in the regions opened up by the low cost airlines - and the airlines have now stopped flying their because it has proved to be economically unviable in the downturn.
Astonishingly some of these property buyers have criticised the airlines who opened these routes and then stopped for the drop in the the value of their investment.
Short term thinking is more to blame for these property abroad owners current situation, where they hadn't considered what would happen if a commercial airline started making cuts in an economic downturn - and just how many if they had sold at a profit would be dropping a note to the airlines which opened the routes to thank them for the money they had made, with a cheque inside the envelope as a way of thanks?
It seems that the blame culture so prevalent in British society today hasn't escaped the property markets.
About the Author
Information about the island of Cyprus is available via yourcyprus.info
Included are companies who offer cheap holidays in Cyprus plus accommodation in Cyprus with reviews of Cyprus hotels
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