British buyers start to dip a toe back in Florida’s property market
It’s not just the indigenous Americans who have been hit hard by the slump in US property values in the wake of the Lehman banking collapse. Thousands of Britons who favor residential property in Florida have also been badly affected. The British Consulate in Orlando estimates that some 400,000 Britons either live in the Sunshine State or have second homes there. One of the more popular forms of holiday home ownership is where the owner spends some vacation time in the property and then lets it out to other visitors for the rest of each year.
The problem is that many Brits have bought with mortgage funding and are now deep in negative equity following the wholesale collapse in property values. Many simply are not getting the rental income that they had hoped for and have been struggling to maintain mortgage payments. The value of holiday homes is estimated to have fallen by as much as 40 % and by up to two thirds around the former hotspot of Orlando.
The saddest stories are probably those of the British expats who had moved to Florida permanently. With mortgages worth far more than the current value of their properties, many have simply thrown in the towel, abandoned their homes and returned to the UK. leaving their debts behind them. There is, of course, no extradition treaty for people who are either unwilling or unable to pay their mortgages.
Most Brits bought their properties using mortgage finance from US banks who foreclose on houses far more quickly than their UK counterparts. The resulting glut of forced sales has seen prices fall below rebuilding costs which means that anyone buying now can secure a property for less than its replacement value and really cant go wrong.
However, the mantra instilled into all Brits from an early age is that the three most important things to consider when buying a house are “ Location, Location, Location “. Mindful of this, shrewd new buyers are focusing on waterfront properties since the supply is physically limited.
If you are minded to join them, it’s probably best to stay for a while in a rental property either on the Atlantic or Gulf Coast and get the feel of various areas before taking the plunge.
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