High UK prices benefit both domestic and overseas investors
Released on = June 19, 2007, 10:41 am
Press Release Author = Jimwatson
Industry = Real Estate
Press Release Summary = One of the big attractions for people looking to buy a property abroad - whether as investors or as buyers looking for a second property overseas for mixed purposes - is a lower cost of living.
Press Release Body = One of the big attractions for people looking to buy a property abroad - whether as investors or as buyers looking for a second property overseas for mixed purposes - is a lower cost of living.
The UK has a reputation as one of the more expensive countries in the world and British tourists and expatriates alike are often pleasantly surprised by the cheap prices to be found in many foreign countries.
This week, Mercer Human Resource Consulting (MHRC) has released the latest edition of its annual Cost of Living Survey. The survey takes in 143 of the world\'s most prominent cities on six continents.
The comparative cost of over 200 items - including housing, transport, food, clothing, household goods and entertainment - are compared. Among other things the survey, described as \"the world\'s most comprehensive\" cost of living index, is used by companies to assess allowances for expatriate employees.
The 2007 survey concluded that London is the second most expensive city in the world, rising from fifth place last year. \"Steep property rental costs, together with the strengthening of the British pound compared to the US dollar, have contributed to the city\'s high ranking,\" commented Yvonne Traber of MHRC.
In the UK, rising inflation has pushed up both prices and interest rates. This in turn has had an effect on property prices and the property market in general. The cost of obtaining a mortgage has become higher, as the base rate of interest has gone up four times in 12 months.
It was increased to 5.5 per cent in May of this year and many analysts think that this is not the last raise that will be seen, predicting the base rate to touch six per cent by the end of 2007. However, the property market has not been significantly dampened, as lack of supply has conspired to keep the prices artificially high.
In one sense, the buy-to-let investor on the domestic scene has benefited from the increase in property prices. More potential first-time buyers have been forced on to the rentals market as they cannot afford to make a purchase at present prices. This has served to further expand the traditional core rentals market of students and young professionals.
However, the high property prices have also prompted investors to look abroad. The strength of the pound means that there are some bargains to be had overseas. At the same time, the rise of the budget airline means that more Britons are going to go abroad this year than ever before, swelling the potential number of tenants for an overseas property.
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