Overseas property boosted by budget airline connections
Published: 10:58 Tuesday 02 January 2007
By Lorna Bourke, Money Columnist
If you want to know where the next property hotspot will be, find out where the budget airlines are planning to open new routes.
Properties located near airports served by low-cost airlines are nearly 40% more valuable than others, according to a survey carried out by Savills Research and holiday-rentals.co.uk. This was one of the key findings of the survey which questioned 12,000 owners of overseas property who use holiday-rentals.co.uk to advertise their properties.
Analysis of properties in the survey showed that the average price of a property located within 10 miles of an airport served by a low-cost airline is 39% higher than for properties within the same distance to an airport without a low cost airline carrier. The research showed that the price impact reduced as the distance from the airport increased - there was only a 2% difference in the average price of properties situated over 80 miles from an airport.
The survey revealed that properties served by low-cost airlines also had higher average rents than those without. The additional rent was as much as 30% for properties within 10 to 20 miles of airports.
'The potential to charge higher weekly rents is enhanced when properties are serviced by one of the cheap airline operators,' said Jacqui Daly, of Savills. 'This is because the travel costs are lower and so holiday makers are willing to pay more in weekly rents for a better holiday property. This is clearly important to investors as these properties are generally easier to let and less likely to suffer from long void periods.'
One of the most important motivations amongst the respondents to the survey for buying holiday properties was their rental potential. When considering the factors influencing price growth, well over half of them recognised that new emerging holiday destinations, characterised by a growing number of flights and low cost airlines, offered the greatest opportunity for price growth.
'Interestingly, the established, medium-distance destinations such as Cyprus and the Canary Islands, where the flight time is about four hours, achieve the greatest capital value premium because of the availability of low-cost flights,' Daly said.
