Spending £70,000 on holidays? You could buy a house for that!

With Brits collectively spending £65 billion on holidays each year and almost three quarters (73%) being creatures of holiday habits and returning to the same place at least twice, thousands of us could be better off financially through buying a second home overseas reveals new research by MRI Overseas Property.

Turn an expensive luxury…

Brits are more than happy to splash out on holidays, with one in five (21%) taking at least four trips a year and almost one in ten (9%) admitting to splurging more than £4,000 a year getting away from it all. The average holiday spend is now a not insignificant £1,477, the equivalent of more than 6% of the average worker’s salary. Furthermore over an adult working lifetime an individual spends an average of £69,419 – three times their average annual salary.

… into profitable relaxation
Instead of allowing a holiday to simply drain their cash the 32 million Brits (72%) who are in the habit of returning to the same destination can harness this tendency by investing in a property. With France and Spain continuing to top the most popular holiday destination lists, regular holiday goers could consider purchasing their own idyllic French hide away or sunny villa on one of the Costas. Not only would this provide a long-term opportunity to own a piece of their holiday destination of choice, but over the years their rental yield could counteract their holiday spend.

A £135,000 apartment in the Languedoc Rousillon area of France, with an average rental yield of 7.3% according to the Global Property Guide 2007, could see a savvy buyer pay back the purchase price in less than 14 years. Any rental income after that would go straight into the owners’ pocket, after accounting for any tax payable. Over the same time period, the average Brit would have spent no less than £19,940 on holidays alone with no financial gain in sight.

Purchasing in emerging markets can also provide a potential long term investment. A £47,000 apartment in Natal, Brazil, currently has an average rental yield of 6% according to the Global Property Guide 2007. Even if this rental yield did not increase over time, the owner would have recouped the cost of the property in less than 17 years, whilst saving on holiday costs during this period.

Darragh MacAnthony, Group Chairman of MRI Overseas Property, said: “Over 35 million British adults set off abroad last year and the majority return to a destination on more than one occasion which raises the question that some of these people would benefit from buying in the area. Buying a property in an area that they love not only offers the flexibility to visit frequently but by renting out the property to others you can also generate an additional income to offset the flight costs for your own trips.

“Instead of the infamous Brits abroad on holiday stereotype, we could become global landlords. Smart investors will almost certainly move towards buying a property overseas capitalising not only on the opportunity to return to the same destination several times over, without paying for the property hire, but also gaining from the rental returns and in the long-term potential capital value.”

Foreign shores or the house next door?
With average property prices in the UK now at £210,100, it is no wonder that one in three (32%) people are considering buying a property abroad just to get onto the housing ladder, as buying overseas can be a much more affordable option and also provides an opportunity to generate an additional income through rentals.

MacAnthony continued: “Of course buying a property is always a big decision and buying overseas is no different. Although you may feel you know a location after holidaying there, owning a property could be a different experience. We always recommend anyone thinking of buying abroad does their research into the type of property and region they buy in and seeks independent financial and legal advice.”

For further information, visit mrioverseasproperty.com.