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UK property downturn means fewer British are investing abroad

Interest in investing in overseas property is high but the credit crunch is preventing many taking the plunge.

According to overseas currency specialists HiFX there is a 30% increase in the number of people enquiring about moving abroad compared with the first half of 2008 but those actually doing so has only risen by 10%.

The organisation believes this is due to many of them being unable to sell properties in the UK because of the credit crunch.

'Bearing in mind 2007 was a record year for emigration, the fact even more people are looking to move abroad this year shows that there is now a very real desire to escape some of the problems in the UK economy,' said Mark Bodega, director at HiFX.

'However, the problem that many people are being confronted with is a simple one – they cannot sell their UK property and, without this equity from the sale of a house, they don't think they can fund their dream move and so are putting their move off.'

International removal firm Anglo Pacific has detected a similar trend. A spokesman said that interest in their international removal services is at a record high, but the number of customers actually moving is down on last year.

'The number of people enquiring about long haul removals has increased significantly for the first half of 2008 compared with the same period last year,' he said. 'This is evidence that there is a real and growing desire by many to emigrate, particularly as 2007 was a record year for the number of people we relocated. However, our actual bookings for removals year to date are down on last year.'

Another reason is that British investors expect to find bargains abroad and when they don't they don't buy. 'The current credit crunch is giving the UK buying public expectations of dramatic price reductions, but this is a misconception,' said Serge Cowan, managing director of Unique Living.

This trend is particularly acute at the higher end of the market. But while the number of British investors is declining the Russians, Dutch and Scandanavians have no such qualms. Many are buying on the French Riviera, in the south of Cyprus and the Costa del Sol.