Increasing numbers of those nearing retirement plan to buy holiday home abroad

Spain is the favoured destination for 1 in 4 holiday home buyers

The number of people aged 45 to 64 considering buying an overseas holiday home has risen to 38 per cent, up from 30 per cent from seven years ago, according to figures from HSBC.

However, the majority of would-be buyers plan to stay in the UK and not move abroad permanently. Nearly two thirds say they would stay in their overseas holiday home abroad for between three and six months a year while a fifth would use it for no more than three months a year.

James Yerkess, HSBC Head of Foreign Exchange, said: "The economic downturn has had an impact on the income and savings of many but it has also helped lower the price of property in numerous overseas locations. Many of the baby-boom generation, who are now approaching retirement, are fortunate enough to remain relatively asset-rich despite recent economic frailties and this has opened up opportunities to take advantage of lower property prices abroad.

"That said, the weakness in many overseas property markets has created some caution among those considering purchasing a property abroad with many saying they would now look to buy smaller properties or homes in less expensive locations."

After Spain, France  and Italy are the most popular destinations. In general, two thirds of those considering buying a property abroad would buy on the coast, while nearly a quarter would prefer the countryside. Only six per cent would buy in the mountains and five per cent in a large town or city.

On average, those considering buying a holiday home abroad would spend £116,846 on the property with the vast majority saying they would purchase the property outright, rather than with a mortgage. A third said they would use savings to fund the purchase while nearly a quarter would downsize in the UK to release the funds required.