Us is an ‘unexpected’ hotspot

Brits are flocking to buy US property despite fears of an imminent recession…

According to research carried out by a Place in the Sun at a Birmingham Roadshow Late January, the increase in popularity has been quite staggering. In their annual top-twenty property destinations, based on where road show attendees are planning or would like to buy their place in the sun, the U.S. climbed from tenth position in 2007, up to fourth position this year.

This is because as the U.S. economy suffers, Brits are getting more dollars to their pound, and combined with U.S. property prices falling, U.K. investors can get excellent value for money in their U.S. property.

Experts are predicting that 2008 will be a turning point for the U.S. property market, and it will finally begin to recover after a three year decline. When overseas property became en Vogue, it stood to reason that the U.S. would be one of the favourites.

Price crash opportunity

With so many tourist attractions in one country, New York, the Grand Canyon, Disney Land, Los Angeles, Hollywood, to name but a few, the United States, one part or another is on most people's do or see-before-I-die lists. These people are now using the price crash as an opportunity to get a holiday home within range of their favourite attractions.

This popularity with tourists, given the currently low property prices gives way to high rental yields. And if the turnaround goes ahead capital appreciation should return to the levels you would expect for an established market of the U.S' calibre, probably around the 8-10% per year.

However, as most people buying in the U.S. currently, are buying primarily a holiday home, with rental when not in use, and sale for profit of secondary consideration, the chances are present capital appreciation figures aren't of great importance. What will be good to know is that Capital Gains Tax drops from 15% to 5% on properties held for more than a year.