The jet-to-let generation

Young buyers who can't afford UK prices are looking further afield to buy. Mary Wilson reports
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The Independent Online

Almost 50 per cent of 18 to 29 year olds are planning to buy a property abroad, according to a survey by the pollsters, YouGov, and two-thirds of those expected their foreign purchase to be their first foothold on the property ladder.

Almost 50 per cent of 18 to 29 year olds are planning to buy a property abroad, according to a survey by the pollsters, YouGov, and two-thirds of those expected their foreign purchase to be their first foothold on the property ladder.

"As property prices in the UK remain prohibitively high and the rental market approaches saturation, it's only natural that investors turn to foreign shores to make their pounds travel further," says Simon Burgess, the director of Oceanico Developments, which commissioned the survey.

The report says that the new breed of first-time buyers, dubbed the "jet-to-let generation", will spend an average of £101,000 to buy abroad - nearly £80,000 less than the average house price in Britain, and figures recently released by Halifax back this up. These showed that property prices in nine out of 10 UK towns are out of reach of first-time buyers, whose average age has now reached 34.

Countries that these fledgling investors are buying in are Spain, France, the United States, Canada, Italy and Portugal - where properties can be found for much less than anything in the UK.

Matthew Orchard, who is 22 and lives with his parents in Somerset, has bought an old stone house in Vale Cordeiro, a village 20 minutes from Amancil, in central Portugal, and just under two hours from Porto, where Ryanair now flies.

Matthew is a landscape gardener and has started up his own company, Down2Earth, and had been looking for somewhere to buy for a while. "I saw flats in Yeovil for £50,000 a couple of years ago, which are worth £85,000 now. Every time I put in an offer, they had been snapped up before I had a chance," he says. He soon realised that with a budget that only stretched to £60,000, he hadn't a chance of buying in England, so whilst talking to a friend who runs Premier Properties International, which sells homes in rural Portugal, he realised that his only chance was to buy there. "I felt I had better get on to the property ladder, wherever it was," he says.

So Matthew bought the two-bedroom house, which has lovely views, two stone buildings attached, which could be turned into more living space and a long stone barn in the grounds, which have olive and fruit trees - all for £38,000, something he could never have dreamed of doing in the UK.

Nicky Smith, who is 34 years old and a humanitarian aid worker, had been looking to buy a property in the south of England, where her friends and family live, but just can't afford it. "It was not possible, especially as I was buying on my own. I did think about buying in Scotland but I thought I would be better off to buy abroad, and it would probably cost less to get there with all the low-cost airlines." She did her research on the internet and settled on the Costa Brava. She found three agents, who were based in the UK and in Spain, which she felt she needed so they could help her understand the Spanish legal processes.

"I took a two-week holiday and saw several properties. I found a development at Las Vinyas, in L'Escala, which is a lovely fishing village, and decided to buy a two-bedroom terraced house off-plan. The agent (IPI Ltd) was very helpful, even with my Spanish mortgage and keeping an eye on the building of the property, which I bought in 2002." Nicky paid £110,000, putting down 30 per cent and borrowing the rest. It is now worth £170,000, making it a pretty good investment. "I couldn't have lived with a huge debt hanging over me, which I would have to have done if I had bought in the UK," she says. "In Spain, the mortgage repayments are reasonable and the living costs low. It really is the easiest and wisest investment that I have ever made."

Stephen Hardy has bought a one bedroom apartment at Solar in Canmore, in the Canadian Rockies, 43 miles west of Calgary. Stephen, who is 24 years old and an IT consultant, had been looking around in the UK before Christmas hoping to come across a bargain. "However, what I wanted was outside my price bracket and although my parents offered to help me, I thought I would look at the overseas market," he says.

Stephen has family who live near Ontario and is a keen snowboarder, so this area seemed a sensible place to start looking. When he found the details of the development, by Pure International, he was immediately taken by the location, the specification and design of the apartments.

"But the main thing which attracted me, apart from the area which really is very beautiful, was the rental guarantee," says Stephen, whose one-bedroom apartment is costing him £160,000. Purchasers can opt to put their property into the Solara Vacation Rental programme, which guarantees them a minimum 8 per cent return for the first two years. "There is a huge rental market and there is no other project of this calibre in the area of Canmore," says Sean Collins of Pure International. "If the property makes more than 8 per cent after costs, we will pass that on to the owner." Stephen reckons that his 8 per cent, which will be around £12,800 a year, will cover his annual mortgage re-payments and running costs.

IPI Ltd, 01273 774098

PURE International, 020 7331 4500

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