Overseas Property Market

The call for new taxes on flights to reduce carbon emissions could affect property prices, according to a UK property company based abroad.

"There was more discussion and calls for action recently over the impact of air travel have on the environment, they say," And one of the most obvious ways to reduce air travel is increasing the price Travel by taxes. It's a win-win situation for governments, more tax revenue and be seen to fight against global warming at the same time. This is a matter of time before cheap air fares on the scale we see today comes to an end.

Owning a second home and a property abroad has shown that the aspiration for the majority of UK residents by recent surveys, and low-cost carriers have opened up new markets overseas property sea plane to destinations not covered by other airlines, or forcing flight prices down where they are in direct competition with more established carriers.

Real estate prices in one hour drive from regional airports served by low cost airlines have tended to escalate in recent years, and it is these areas that would be hardest hit by higher taxes on flight .

The areas that feel least impact would be northern France, as many owners of second homes in the United Kingdom access by ferry and Channel Tunnel, and areas where owning a property abroad was in vogue long before the new airlines started, and when air fares were proportionately higher than they are today. Access to France from the UK has improved recently with Eurotunnel cutting the journey time of twenty minutes.

"The Costa del Sol for example we believe not to be affected by both taxes increased air - even if the development could bring prices down anyway."

But there is a warning that the lower price end of the market could be reached over the top.

"There was a significant increase in second home in the last decade," the company said. "Gone are the days when he was only the rich who owned a property abroad. Developers in Spain, Greece and Cyprus have built buildings with units of two and three bedrooms that are affordable for many middle-income families. Given that mortgages are readily available and it is often just twenty per cent of the asking price to be found a home abroad has become reality for millions of Europeans. But if air fares increase significantly and vacationers who rent the owners apartments and villas declines, many will need to sell the rental income pays the mortgage. There could be a glut of properties come on the market which will send prices down. "

Exceptions to the rule could be in the two European tax havens of Monaco and Andorra, where there is no tax on income for residents.

"Historically, tax havens have been popular, no matter how the economy is. When someone buys a property in Monaco it often does not matter to them except a few million euros as they will save more than the tax for the duration of their stay there . Andorra is a little different because it is a tax haven but also people buy ski apartments there, adding to demand. "

Real estate prices in Andorra have risen by an average of ten per cent per annum over the last decade, and some predictions are for this figure to be closer to five per cent for 2006.

If governments do start introducing new taxes on airline tickets to slow and possibly reverse the rise in air travel there could be good news for some property buyers though.

"In some areas the second home market has significantly increased prices, with many young local people being forced to move away from their towns and villages.

The United Kingdom and United States populations are highly mobile, but in some countries popular with holiday home buyers there are three or four generations of one family.