Weak pound hits Britons' overseas home purchases
ISTANBUL - Daily News with wires | 3/9/2010 12:00:00 AM |
The weakness of the pound has encouraged Britons to buy properties in their own country rather than overseas.
The number of second homes in England climbed in 2009 to its highest level in at least seven years as the pound’s weakness encouraged Britons to buy properties in their own country rather than overseas.
The currency weakness may be seen as boding ill for Turkish property sales in the Mediterranean region, but an expert said this is far from being a top concern for Turkey.
A total of 245,384 British properties were registered as vacation homes or pieds-a-terre, 2.6 percent more than in 2008, property broker Knight Frank announced Tuesday. The number of British households owning real estate outside the U.K. stagnated at 429,063 after more than doubling since 2001, according to an estimate by Savills, another broker.
“The number of British households owning a vacation home abroad was little changed in 2009 after the pound depreciated,” Bloomberg reported. “Second homes in England climbed after dropping 0.4 percent in 2008.”
“A weaker pound... encouraged buyers to look at second homes in the U.K.,” Bloomberg quoted Liam Bailey, Knight Frank’s head of residential research, as saying.
Low borrowing costs, renewed confidence among buyers and the prospect of higher investment returns made second homes in Britain more attractive last year, Bailey said.
Still, the pound’s woes should not be of much concern for Turkey, according to Gary S. Lachman, a partner at the Istanbul legal firm Lachman & Yeniaras. “Until the U.K. figures out how to import the warm waters and sunshine of Bodrum, Göcek, Fethiye and Alanya, Turkey’s vacation-home developers need not be too concerned,” Lachman told the Hürriyet Daily News & Economic Review.
“They may want to change the ‘flavor’ of their asking currency from dollars or euros to Turkish Liras,” he added. “This is because the lira is still at a relatively attractive exchange rate with the pound.”
The more important considerations for Turkish developers are the supply of new homes versus re-sales, U.K. buyer concerns about titles, costs of transportation and relationships with local municipalities, according to Lachman.
“To have truly sustainable development in Turkey’s resort towns, the schools need to be upgraded and perhaps an international school should seize the opportunity to have a campus in Bodrum,” he said. “I would recommend that both my developer and foreign purchaser clients be more concerned about land-title issues. We have seen some real horror stories coming out of Bodrum, Marmaris and all along the Aegean coast.”
“Sales have certainly fallen,” said Süha Kumbasar of Remax Pasha in the Aegean resort town Kuşadası. “Moreover, some Britons have been selling homes they purchased by paying high prices in 2005 and 2006. Sales in 2010 have declined further to date.”
Only a small group of foreign buyers are bidding for land and big projects as the prices have also declined, Kumbasar told the Daily News, adding, “But we have nearly no residential sales.”