Survey Indicates UK First Time Buyers May Turn Back to Overseas Investment

OMG I thought I had fallen into a time conduit and been sucked into 2005 then... I read an article in Sky News pertaining to a survey in which nearly a quarter of UK first time buyers have said they would consider buying a home overseas for its greater investment potential and increased value for money.

Such articles were commonplace in the mid-noughties when it was thought that many first time buyers were investing in overseas property in order to use the rental income to boost their earnings sufficiently to get a mortgage in the UK.

So... seeing one now I immediately thought: what kind of source are we dealing with here; Friday night in the Tamworth Arms. I was wrong though, the survey comes from a more reputed base than any of those seen in the mid-noughties. In this case the survey was commissioned by Moneycorp and surveyed a pool of 2000 first time buyers.

Obviously it would have been better if the survey had been commissioned by someone less partial. That said: a pool that size has to be given a great deal of validity, especially when the survey's other findings are confirmed by many other sources.

Namely: the survey also found that 70% of first time buyers have given up on owning a home in the UK. This is confirmed by several other prominent sources recently.

Not least the recent report by Nationwide, which found that the average house price is now 5.5 times the average salary. This is far greater than the long-run (30year) average of 4 times. Add to that the fact that first time buyers need at least a 10% deposit in order to get a decent deal on a mortgage and you can see why owning a home in the UK is currently outside the reaches of most first time buyers.

With that knowledge the only surprise is the percentage of them considering a purchase overseas. Don't get me wrong it is a good surprise, because it confirms earlier reports that investors are once again entering the overseas property arena, after almost-nothing but lifestyle buyers since the crunch. Time will tell if considerations become determinations and desires result in increased sales.