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Holiday Property - UK - January 2011

Consumer interest in overseas property is returning to pre-recessionary levels: a third of people surveyed by Mintel express some degree of interest in property abroad; 13% would like to sell up in the UK and move abroad in the future and 10% express a definite interest in buying a holiday home. This report analyses the market for holiday property abroad, investigating the core market factors, industry trends, strengths and weaknesses, operators in the industry, consumer attitudes and preferences

  • In 2010 there were an estimated 370,000 second homes abroad owned by households in England, dipping slightly from the previous year with some existing owners forced to sell up through changing economic circumstances and a low level of completed sales.
  • After plummeting in the recession, consumer interest is again reviving. In 2010, total search volume on the portal Rightmove Overseas increased by 19% compared to a fall of 28% in 2009. Some 13% of consumers would like to sell up in the UK and move abroad in the future and 10% would like to buy a holiday home.
  • However consumers are extremely cautious: seven out of ten potential buyers are concerned about being ‘ripped off’ or encountering legal problems when buying abroad.
  • Property speculation in emerging markets is largely a thing of the past and the market is now characterised by affluent lifestyle buyers concentrating on traditional holiday locations.
  • Those interested in buying are more likely to be male than female, heavily weighted towards the AB socio-economic group, living in households with income over £50,000 and with children. Regionally, interest peaks amongst those living in the London area, followed by the North West.
  • Consumers see the biggest selling-points of holiday homes abroad as the opportunity they offer for entertaining friends and family and for learning about the local destination culture.

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Table of contents

  1. Issues in the Market

      • Key issues
        • Definition
          • Abbreviations
          • Future Opportunities

            • The realest of holidays
              • Virtues of transience
              • Market in Brief

                • Consumer interest revived by bargain hunting...
                  • ...but caution is the watchword
                    • Tried and trusted
                      • Keep it in the family
                        • Local flavour
                          • Window of opportunity
                            • Selling a lifestyle
                            • Internal Market Environment – Property

                              • Key points
                                • Downward price pressure continues
                                  • Figure 1: Composition of UK household sector’s net worth, 2000-09
                                  • Figure 2: Average house prices in the UK, by region, 2005-10
                                • Return to cash/savings?
                                  • Figure 3: Method of funding of holiday home purchase, by length of ownership, November 2009
                                • Under pressure
                                  • Green shoots of recovery...
                                    • Figure 4: International property price movements, Q3 2009 and Q3 2010
                                  • ...but bottom not yet reached in key markets
                                    • Holiday lettings tax changes
                                    • Internal Market Environment – Holidays

                                      • Key points
                                        • High priority but challenging conditions remain
                                          • Figure 5: Expenditure priorities, 2005-10
                                          • Figure 6: Overseas holidays, expenditure and average cost, 2005-10
                                        • End of the staycation?
                                          • Figure 7: Domestic holidays and expenditure, 2005-10
                                        • Frequent travellers
                                          • Figure 8: Percentage of adults booking UK and overseas holidays, 2010
                                        • Spain still accounts for quarter of holidays abroad
                                          • Figure 9: Outbound holiday visits, by country visited, 2005-09
                                        • LCCs still growing through downturn
                                          • Figure 10: Scheduled passengers carried, by main low-cost airlines, 2005-10
                                        • Network expansions continue
                                          • Aviation alternatives for property owners
                                          • Broader Market Environment

                                            • Key points
                                              • Consumer spend to remain subdued
                                                • Figure 11: GDP, PDI, consumer expenditure and savings, at current prices, 2005-15
                                              • Rate rises expected
                                                • Squeezed middle
                                                  • Figure 12: UK consumer confidence index, January-December 2010
                                                • AB growth is a plus for property abroad
                                                  • Figure 13: Forecast adult population trends, by socio-economic group, 2005-15
                                                • A family affair
                                                  • Figure 14: Forecast adult population trends, by lifestage, 2005-15
                                                • Retirement dreamers
                                                  • Figure 15: Influencing factors in initial holiday home purchase, by length of ownership, November 2009
                                                • Pound recovers partially
                                                  • Figure 16: Annual average exchange rates for Sterling, 2005-10
                                              • Competitive Context

                                                • Key points
                                                  • One in 14 holiday in their own property
                                                    • Figure 17: Type of accommodation used on all holidays/short breaks taken in the last 12 months, 2010
                                                  • Six in ten second homes are overseas
                                                    • Figure 18: Households in England with a second home – domestic and abroad, 1998/99-2007/08
                                                • Strengths and Weaknesses in the Market

                                                    • Strengths
                                                      • Consumer interest returning
                                                        • Positive associations
                                                          • AB growth forecast
                                                            • Love affair with Spain and France
                                                              • Budget airline resilience
                                                                • Weaknesses
                                                                  • Macroeconomic risks
                                                                    • Key drivers of expansion have ended
                                                                      • End of the dream for many?
                                                                        • Rip-off/legal fears widespread
                                                                          • Timeshare distrusted/ fractional yet to break through
                                                                            • Key points
                                                                              • Property apps
                                                                                • Promoting hot property
                                                                                  • Selling rental potential
                                                                                    • Selling a ready-made social life
                                                                                      • Holiday home exchange
                                                                                      • Market Size

                                                                                        • Key points
                                                                                          • Decade of property mania comes to an end...
                                                                                            • Figure 19: Households in England with a second home abroad, 1997/98-2007/08
                                                                                            • Figure 20: Number of second homes abroad owned by households in England, 2008/09-2009/10
                                                                                          • ...but consumer interest reviving
                                                                                          • Segment Performance

                                                                                            • Key points
                                                                                              • France and Spain account for half of homes
                                                                                                • Figure 21: Number of second homes abroad owned by households in England, by destination, 2008/09
                                                                                              • Top five destinations take over
                                                                                                • Figure 22: Search activity on Primelocation International site split, by location, November 2007-October 2010
                                                                                              • Interest in Spain more resilient than France
                                                                                                • Figure 23: Percentage change in search activity on Rightmove Overseas site, by location, July 2008-July 2010
                                                                                              • Characteristics of the leading markets
                                                                                                • Spain
                                                                                                  • France
                                                                                                    • Portugal
                                                                                                      • Italy
                                                                                                        • US
                                                                                                        • Companies and Products

                                                                                                            • British Homes Group
                                                                                                              • Fractional Life
                                                                                                                • GK Italian Property
                                                                                                                  • Holidaylettings.co.uk
                                                                                                                    • Homesoverseas.co.uk
                                                                                                                      • Interval International
                                                                                                                        • Primelocation International
                                                                                                                          • Property-abroad.com
                                                                                                                            • RCI
                                                                                                                              • Rightmove.co.uk (Overseas)
                                                                                                                              • Property Ownership and Aspirations

                                                                                                                                • Key points
                                                                                                                                    • Figure 24: Holiday property abroad ownership and aspirations, November 2010
                                                                                                                                  • A third of consumers show interest
                                                                                                                                    • The fractional moment?
                                                                                                                                      • Dreams of escape
                                                                                                                                        • Networked nomads
                                                                                                                                        • What People Think About Property Abroad

                                                                                                                                          • Key points
                                                                                                                                              • Figure 25: Attitudes towards holiday properties abroad, November 2010
                                                                                                                                              • Figure 26: Attitudes towards holiday properties abroad – users v potentials, November 2010
                                                                                                                                            • Negative attitudes
                                                                                                                                              • Consumers get nervous
                                                                                                                                                • Maintenance hassles
                                                                                                                                                  • Promoting holiday variety
                                                                                                                                                    • Timeshare mistrust
                                                                                                                                                      • Positive attitudes
                                                                                                                                                        • Family and friends
                                                                                                                                                          • Deep holidays
                                                                                                                                                            • Money matters
                                                                                                                                                              • Window shoppers
                                                                                                                                                              • Dream Holiday Home Destinations

                                                                                                                                                                • Key points
                                                                                                                                                                    • Figure 27: Preferred holiday home destinations, November 2010
                                                                                                                                                                  • Spain still tops but US gains on France
                                                                                                                                                                    • The most affluent prefer France to Spain
                                                                                                                                                                    • Dream Holiday Home Factors

                                                                                                                                                                      • Key points
                                                                                                                                                                          • Figure 28: Important factors for choosing a holiday home, November 2010
                                                                                                                                                                        • Sun and sea
                                                                                                                                                                          • Rentability most important for US
                                                                                                                                                                            • Traditional properties most popular
                                                                                                                                                                              • Feeling like a local
                                                                                                                                                                                • City to city
                                                                                                                                                                                  • A fifth seek lifestyle facilities
                                                                                                                                                                                  • Targeting Opportunities

                                                                                                                                                                                    • Key points
                                                                                                                                                                                      • Target groups
                                                                                                                                                                                        • Figure 29: Holiday property abroad target groups, November 2010
                                                                                                                                                                                      • Serious Potentials
                                                                                                                                                                                        • Demographic profile
                                                                                                                                                                                          • Marketing message
                                                                                                                                                                                            • Pipe Dreamers
                                                                                                                                                                                              • Demographic profile
                                                                                                                                                                                                • Marketing message
                                                                                                                                                                                                  • Lukewarm
                                                                                                                                                                                                    • Demographic profile
                                                                                                                                                                                                      • Marketing message
                                                                                                                                                                                                        • Out of the Question
                                                                                                                                                                                                          • Demographic profile
                                                                                                                                                                                                            • Marketing message
                                                                                                                                                                                                            • Appendix – Property Ownership and Aspirations

                                                                                                                                                                                                                • Figure 30: Most popular statements on holiday property abroad ownership and aspirations, by demographics, November 2010
                                                                                                                                                                                                                • Figure 31: Next most popular statements on holiday property abroad ownership and aspirations, by demographics, November 2010
                                                                                                                                                                                                            • Appendix – What People Think About Property Abroad

                                                                                                                                                                                                                • Figure 32: Attitudes toward holiday properties abroad, by demographics, November 2010
                                                                                                                                                                                                                • Figure 33: Further attitudes toward holiday properties abroad, by demographics, November 2010
                                                                                                                                                                                                                • Figure 34: Other attitudes toward holiday properties abroad, by demographics, November 2010
                                                                                                                                                                                                                • Figure 35: Additional attitudes toward holiday properties abroad, by demographics, November 2010
                                                                                                                                                                                                                • Figure 36: Attitudes towards holiday properties abroad, by most popular statements on holiday property abroad ownership and aspirations, November 2010
                                                                                                                                                                                                                • Figure 37: Attitudes towards holiday properties abroad, by next most popular statements on holiday property abroad ownership and aspirations, November 2010
                                                                                                                                                                                                            • Appendix – Dream Holiday Home Destinations

                                                                                                                                                                                                                • Figure 38: First preference holiday home destinations, by demographics, November 2010
                                                                                                                                                                                                                • Figure 39: Preferred holiday home destinations, by most popular statements on holiday property abroad ownership and aspirations, November 2010
                                                                                                                                                                                                                • Figure 40: Preferred holiday home destinations, by next most popular statements on holiday property abroad ownership and aspirations, November 2010
                                                                                                                                                                                                                • Figure 41: Preferred holiday home destinations, by most popular attitudes towards holiday properties abroad, November 2010
                                                                                                                                                                                                                • Figure 42: Preferred holiday home destinations, by next most popular attitudes towards holiday properties abroad, November 2010
                                                                                                                                                                                                                • Figure 43: Preferred holiday home destinations, by other attitudes towards holiday properties abroad, November 2010
                                                                                                                                                                                                            • Appendix – Dream Holiday Home Factors

                                                                                                                                                                                                                • Figure 44: Most important factors for choosing a holiday home, by demographics, November 2010
                                                                                                                                                                                                                • Figure 45: Next most important factors for choosing a holiday home, by demographics, November 2010
                                                                                                                                                                                                                • Figure 46: Other important factors for choosing a holiday home, by demographics, November 2010
                                                                                                                                                                                                                • Figure 47: Important factors for choosing a holiday home, by most popular statements on holiday property abroad ownership and aspirations, November 2010
                                                                                                                                                                                                                • Figure 48: Important factors for choosing a holiday home, by next most popular statements on holiday property abroad ownership and aspirations, November 2010
                                                                                                                                                                                                                • Figure 49: Important factors for choosing a holiday home, by most popular attitudes toward holiday properties abroad, November 2010
                                                                                                                                                                                                                • Figure 50: Important factors for choosing a holiday home, by next most popular attitudes toward holiday properties abroad, November 2010
                                                                                                                                                                                                                • Figure 51: Important factors for choosing a holiday home, by other attitudes toward holiday properties abroad, November 2010
                                                                                                                                                                                                            • Appendix – Targeting Opportunities

                                                                                                                                                                                                                • Figure 52: Attitudes towards holiday properties abroad, by target groups, November 2010
                                                                                                                                                                                                                • Figure 53: Holiday property abroad ownership and aspirations, by target groups, November 2010
                                                                                                                                                                                                                • Figure 54: Preferred holiday home destinations, by target groups, November 2010
                                                                                                                                                                                                                • Figure 55: Important factors for choosing a holiday home, by target groups, November 2010
                                                                                                                                                                                                                • Figure 56: Target groups, by demographics, November 2010

                                                                                                                                                                                                            Companies Covered

                                                                                                                                                                                                            • Air France
                                                                                                                                                                                                            • Aylesford International
                                                                                                                                                                                                            • Bank of England
                                                                                                                                                                                                            • British Airways Plc
                                                                                                                                                                                                            • British Chamber of Commerce
                                                                                                                                                                                                            • British Homes Group
                                                                                                                                                                                                            • Brittany Ferries
                                                                                                                                                                                                            • Cavendish Brooke International
                                                                                                                                                                                                            • Civil Aviation Authority
                                                                                                                                                                                                            • Daily Mail and General Trust Group plc
                                                                                                                                                                                                            • DFDS Seaways Limited
                                                                                                                                                                                                            • Erna Low
                                                                                                                                                                                                            • HBOS plc (Halifax Bank of Scotland)
                                                                                                                                                                                                            • Interval International
                                                                                                                                                                                                            • Kantar Media
                                                                                                                                                                                                            • Knight Frank International
                                                                                                                                                                                                            • Nationwide Building Society
                                                                                                                                                                                                            • P&O Ferries
                                                                                                                                                                                                            • Rightmove Plc
                                                                                                                                                                                                            • Ryanair Holdings plc
                                                                                                                                                                                                            • SeaFrance Ltd
                                                                                                                                                                                                            • Thomas Cook Airlines
                                                                                                                                                                                                            • Trinity Mirror plc
                                                                                                                                                                                                            • TripAdvisor LLC
                                                                                                                                                                                                            • Walt Disney Company, The
                                                                                                                                                                                                            • Wyndham Worldwide Corporation

                                                                                                                                                                                                            Holiday Property - UK - January 2011

                                                                                                                                                                                                            £1,750.00 (Excl.Tax)