Published on : Mon, 02 May 2005 00:00GMT
by : Lucy Andrews

Stability in the brick and mortar market seems to have not only made homes more affordable but has also brought holiday homes within the reach of potential property investors.

People can be seen making prompt mortgage repayments because of the consistent house prices and are in fact, also viewing foreign destinations plausibly for making homes.

An upsurge in property investments has been noticed in a recent research, with homemakers looking at making substantial investments in numerous properties both at home and abroad in order to derive the maximum benefit from low property prices. In the last three months, the number of domestic holidays spent in holiday homes escalated by 24 per cent, clearly indicating the investment boom in holiday homes.

The research also shows homemakers zeroing in on France as the next major destination for holiday home investment, in view of its favourable property prices as well as the country’s picturesque locations.

Moreover, with France being reasonably close and also much cheaper than areas in UK, it understandably has emerged as a favourite for investors looking for foreign properties. Paris has properties much economically priced in its suburbs than areas in Greater London and its convenient short train distance from UK has also rendered it easily accessible. What’s more, plummeting airfares have made the short distance between France and UK even shorter. Regarding other prospective holiday home destinations like Greece, Spain and Italy, they appear considerably distant for UK property investors.

Second homes, are generally used as chalets or holiday homes which are leased out when not in use. Therefore, investors revel once their properties record higher prices as investments tend to block sizeable portions of household assets. Prices in the Cote d'Azur and Languedoc will subsequently see investors smiling as they are expected to rise between 10 and 15 per cent every year just like properties in Paris and the Alps.

Large commercial investors have also found their way to France along with holiday home investors. TIAA-CREF, the American education system has invested about €493 million in real estate in France, making France the leading venue of its European establishments. This has further lured foreign entrepreneurs into launching their European operations in either of the two countries, France or the UK, or sometimes a share in each of them.