Despite ongoing financial problems in the eurozone, the top two destinations for home buyers looking to snap up a property abroad are within the troubled region, research suggests.
France tops the list, with 23 per cent of potential buyers looking to own a property across the Channel, according to the HiFX Property Hotspots report.
However, interest from would-be buyers has dwindled in recent months - the same survey in March found that 35 per cent were interested in snapping up a property in France - a 12-point drop.
The fall could follows a recent property tax hike for foreign owners as the new socialist French government attempts to raise extra revenue.
British owners of French property were hit this summer with the imposition of a 15.5 per cent extra social charge on profit on their homes, which cannot be offset against their UK capital gains tax bill.
But many of those looking to buy in France will probably aim to own their property for many years, rather than sell it on for a profit shortly down the line.
Despite the fall in interest, Mark Bodega, director at HiFX, remains upbeat. He said: ‘France remains a safe bet for Brits. It goes without saying that the sun and lifestyle are a big pull but buyers can now get better value for their money and take advantage of the weakening euro.’
Just behind France in the popularity stakes is Spain. According to the survey, 19 per cent of potential overseas property buyers want to buy in the sun. This is a rise of three per cent compared to the March survey findings.
Potential buyers were less keen on France in October than they were six months earlier in March 2012
However, the allure of Spain and popular 'hotspot' areas with British buyers - such as the Costas - are lower in the rankings with experienced property owners. Just nine per cent said they would buy there if they were considering purchasing another property.
In May, Money Mail – This is Money’s sister title – highlighted how many expats with properties in Spain are struggling to sell-up. In some instances, it has taken three years - and in during that time, prices have fallen by as much as 70 per cent, eating into equity.
In June, we reported figures showing property prices have slumped by 12 per cent in just one year in Spain – and despite this being the steepest fall in five years, experts suggest the figures underestimate the drops being seen. However, some may see lower prices as an ideal opportunity to scoop up a bargain home in the sun.
Mark Bodega added: ‘Spain is still popular with Brits who are hoping to take advantage of lower property prices. In years gone by bargain-hunters would focus inland, particularly looking for rundown properties that needed some work.
‘As inland prices have fallen the most since the property crash this is still true, however, prices have fallen on the coast dramatically as well giving bargain hunters plenty of choice.’
Home in the sun: Despite property prices crashing in Spain, many are still lured in by the better weather and relaxed lifestyleThe third most popular destination for people looking to buy abroad is across the Atlantic, with seven per cent saying they are turning their attentions to the US - another property slump hit location.
Italy, Cyprus, Portugal and Switzerland make the rest of the top seven list for destinations to buy overseas.
The countries Brit buyers were considering in March 2012, according to HifxOf those buying a home abroad in the coming years, 28 per cent said they will spend between £50,000 - £100,000, while a further 16 per cent said they plan to spend between £100,000 and £150,000.
Purchases will largely be funded through savings, with 43 per cent stating this was how they planned to buy abroad - almost a quarter said they plan to sell their UK home to fund their overseas property dream.
The report revealed that lifestyle and culture are the most appealing aspects when it comes to considering buying a place abroad, closely followed by the allure of foreign weather.
Having a better standard of living and the belief that it is cheaper to own a property abroad than in the UK is another key reason for those who were questioned.
Mark Bodega added: ‘It’s still a big dream for many Brits to either sell up and move abroad or own a second property overseas, and many understandably think now is a good time to pick up a bargain in the sun and make the most of the foreign weather and culture.
‘Our advice is always to make sure people research their options fully first, there are chances now to pick up some great deals but the current eurozone problems still mean some countries can be quite unstable.’
Sterling has strengthened against the euroSterling is towards the upper end of its five-year range versus the euro, boosting overseas home buyers' spending power.
The current rate of €1.25 (80p to the euro) is well above the January 2009 low of €1.02. However, it is still well off the rates of €1.40-50 last seen in late 2007.
For the first half of 2012, the pound made gains against the single currency as the eurozone debt crisis re-erupted.
At its July peak of more than €1.28 (78.1p to the euro), it was nearly 18 cents or 16 per cent stronger than it had been a year earlier at its 2011 trough.
Read the This is Money guide - where is the pound heading against the euro and dollar?
