More than a quarter of a million Brits currently own a foreign property, meaning the trauma and cost of holiday arrangements could become a thing of the past.

Indeed, a third of current and potential overseas homeowners believe that owning a holiday home will make family breaks more affordable and a quarter feel it would reduce the sheer stress of arranging holidays.

Millions of Brits currently jetting away on the half term holiday will be returning home stressed out from the organisation and cost of the holiday. Three in ten (31%) are considering buying a property abroad, and a quarter (25%)* of them are doing so just to avoid the stresses and strains of the annual family holiday.

Mike Freer, Head of Business Development at NatWest International Personal Banking comments: “Holidays should be fun and relaxing but sadly this isn’t always the case. The hassle and expense of arranging holidays can be hugely traumatic - from deciding where to go and remembering to pack everything but the kitchen sink, yet keeping under the new airline luggage weight restrictions. And the holiday itself can be spoiled by dreadful food, poor accommodation, meaning that Brits end up needing another holiday when they return!

”Holiday homes ‘make sense’

However, as three in ten (29%)* of people do, or plan to return to the same destination each year, it makes sense to consider buying a property there. Over half (52%)* of those who are considering buying a property abroad will look to a place they have already been to on holiday.

Over six in ten (64%)* of those that are considering buying abroad are planning not just to use their new property as a holiday home, but to live abroad there permanently. A fifth (18%)* plan to move when they retire, however 17% want to leave within the next five years.

Mike Freer concluded: “Buying a holiday home abroad is increasingly becoming the norm for British families. Spain continues to top the tables as the most popular overseas hotspot. While the upfront purchase cost is a huge financial commitment, the long term benefits of holiday homes can be fantastic as they provide great investment potential, a wonderful lifestyle and a permanent escape from the hassle and expense of holiday arrangements. A holiday home can literally pay for itself.”

The credit crunch 'waiting game'

New home prices have continued to fall over the last three months...

The squeeze on credit has also had a dampening effect on the home buying public. Four interest rate rises in the last twelve months have also dented consumer confidence, with potential homebuyers pursuing a ‘wait and see’ approach.

Apartments still make up the majority of the housing mix at just over 57%. The demand for family homes is still not being met resulting in an increase in incentives and discounts for apartments.

While the average price of a new home (stock price) continued to fall last month, the price buyers are willing to pay (demand price) has increased, showing that buyers have confidence in the new homes market.

FTBs ‘rapidly vanishing’

Over the summer, prices have continued to fall. However, prices for new build prices are still up on this time last year. The incentives that developers continue to offer on apartments appeal to rapidly vanishing first time buyers, who are typically looking for a smaller dwelling as a first step.

With these borrowers having to rely on large loans to get them onto the ladder and house price growth rapidly exceeding the average wage rise, incentives are a welcome help.

All areas of the country have seen a decrease in prices apart from Wales and the South West which have seen a monthly price increase of 3% and 4% respectively.

The second homes market is proving popular in the South West and wealthy buyers and buy-to-let investors are investing in second homes following the summer season and a return from holidays.

Outward migration continues

The ability to work from afar is also increasing, allowing people to spend more time out of London, in their second homes, therefore pushing prices up in these areas.

Outward migration continues for both London and the South East this month, -7.8% and -4.4% respectively. Commuter hotspots still remain popular, with inward migration strong in East Anglia.

The Northern hotspots are still proving the most popular with new home buyers, consequently driving up prices. Strong inward migration continues to be recorded with 4.2% in the North, up from last months 3.8%.

British homebuyers fall into one of five personalities when buying a home; the aspirant fledgling, those that have been around the block, the savvy long-haulers, the bandwagoneers and the wallflowers...

This is according to the “House Price Expectations” report by the Building Societies Association (BSA), the trade association for the UK’s building societies. based on research conducted by Ipsos MORI.

However people react to the UK housing market, there is a personality to describe each one.

Aspirant fledglings

These homebuyers possess a strong desire to have a home they can call their own, and put an end to “wasting” money on rent. They are generally optimistic about the market and house prices but, because of their inexperience they are more likely to seek out advice from friends and family, not to mention estate agents, the media and television. Many are concerned that they might be left behind if they do not buy, and that their dream home might escape their reach.

Been around the block

Experience counts for these homebuyers. They are more likely to rely on their own analysis of the market than media reports, drawing on the know-how they have accumulated in previous house moves. Most accept that house prices could fall. The value they derive from owning their home is more important to them than the prospect of a financial return. However, already having a foot on the ladder reduces the fear of being left behind by rising house prices.

Savvy long-haulers

This group of buyers makes up the majority of investors. They are investing for the long-term, having considered other investment options available to them. Often, their investment is to provide for them in retirement. They tend to give greater consideration to the timing of their purchase than homebuyers do. Media and television reports are pretty unpersuasive to them, as are the proclamations from property investment companies. Long-term trends are more important to their price predictions than is the case for many homebuyers.

Bandwagoneers

These investors have entered the property market because they had seen other investors doing so. They are much more likely than other investors to be influenced by television programmes and media reports about how lucrative buy-to-let can be and the future of house prices. Property investment companies are also relatively more persuasive to them. They make up the minority of investors, however.

Wallflowers

These participants may well fall into one of the above groups. Currently standing on the sidelines, they carefully consider the timing of their purchase and are ready to enter the market if they see prices fall. Falls in price represent a buying opportunity, possibly because they consider that property is currently over-priced. Although they still expect prices to rise, a greater proportion than other participants expect, or perhaps hope, that prices will fall in the next year.

Adrian Coles, Director General of the BSA comments on the report’s findings: “This report looked to examine how people think about residential property purchase and how they form their expectations of future movement in house prices. People are motivated by a variety of reasons to enter the property market; a diversity that is likely to add to the resilience of the market should house price growth decrease or even fall.”

“In addition, different groups rely on different sources of information to construct their expectations of future price movements and the general state of the housing market. The report suggests that those buying property generally do give great consideration to a wide number of factors and enter the market with their eyes open.”