How do UK house prices compare to abroad?

In the UK we continue to obsess about property prices, and with the housing market slow right now, there is plenty for us to complain about.

But how does our market compare to those a little further afield - and what are the future prospects?

Things not so bad here
Mark Bodega from currency specialist HifX told MSN Money that, in many cases, property markets outside of the UK are no better off.

"In some cases, such as Spain and the US, the situation is significantly worse," he says.

Melanie Bien from broker Private Finance agrees that, although we may complain about the difficult housing market in the UK, the situation is a lot better here than in many other countries.

"Financial turmoil in continental Europe and the US is having a knock-on effect on house prices, interest rates and the ability to get funding. Lenders may have reined back on the volume of lending they are prepared to do in the UK, but the situation is much worse elsewhere, with greater deposits, stricter criteria, and higher interest rates all playing a part."

Nigel Lewis, property analyst at PrimeLocation.com, adds that while many European countries and Florida became more expensive than the UK during the boom, the global recession has thrown this into confusion.

"Today, while British prices have largely held, many overseas markets have dropped significantly, and particularly parts of Spain, Portugal and Florida," he says.

Here we look at some of the favourite overseas holiday destinations for Brits, and see just what you can get for your money - based on the average UK house price of £175,000.

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France
The property market in France has not been as badly affected as in many other countries.

House prices dropped by around 10% in 2008-09, but the market started to pick up again last year, and with prices now starting to creep back up again, the outlook is more optimistic.

French estate agent trade body, the French National Association of Immobiliers, forecast an increase of 6% across France throughout 2011 and 2012, with the most popular areas, such as Paris and the French Riviera, being forecast to raise as much as 15%.

It also found that house sales were up from less than 600,000 transactions in 2009 to 700,000 in 2010, and anticipates that sales will improve by a further 100,000 in 2011.

An increase in demand for French property is also likely to help drive house prices back up. "House prices have risen across much of France," says Bien. "It also remains easy to get funding here."

As a result, Brits are slowly returning to the country, although those that are tend to be more affluent, older buyers who, having held off for the past few years, are now dipping a cautious toe back into the water.

According to Miranda John, international manager at Savills Private Finance, there are still a significant number of international lenders and private banks lending.

"There is a competitive market with many French banks happy to lend to non-residents with a good range of products up to an average of 80% loan-to-value (LTV) - although lending criteria has been tighter over the last year."

Equally, interest rates are low, with some lenders now offering ultra-cheap 25-year fixed-rate deals at just over 4%, according to French property specialist, Ellisium Partners - making now a good time to invest.

In Gourdon, in the Lot/Dordogne region, £175,000 would buy you a three-bedroom unrestored country house, with three hectares of land and several outbuildings, or, it would buy you a modern three-bed house with private swimming pool in a luxury complex in Chalais, Charlante, according to estate agent Jackson-Stops & Staff, International.

In Provence, £175,000 would buy you a two-bed duplex on a development that comes with a heated indoor swimming pool, jacuzzi and sauna, according to property agent, Terresens.

Bing: find homes to buy in France

Spain
The economy in Spain is still recovering from the property crash in 2007 and, despite improving slightly in 2010, house price decline has started to accelerate again in 2011, according to the INE, Spain's National Institute of Statistics.

Its figures show residential property prices fell 2.2% in the three months to September, compared with the same period in 2009. Separate findings from estate agent Knight Frank show house prices fell 5.1% in the past year - and have fallen 16% since their peak - while figures from property portal Idealista.com show vendors are dropping their asking prices in record numbers.

There is now speculation that prices are set to keep falling for another two years.

"Property experts point out that the latest economic data from the Bank of Spain shows the full brutal extent of the country's real estate crash," says Bodega. "They also point to the recent Eurozone interest rate rises which are likely to put further downward pressure on Spanish property prices."

Bien agrees that the outlook is not particularly bright.

"The Spanish market is still incredibly depressed, and it is hard to see significant improvements in the market any time soon," she says. "However, some areas, such as the Canary Islands and Madrid are more resilient in terms of prices."

John adds that most international lenders and private banks have withdrawn from the market.

"National banks are still lending, but with tighter affordability and higher pay rates due to the bank's own cost of borrowing," she says. "The maximum LTV tends to be around 70% but can be as low as 50% depending on property and location."

In Almeria, Andalucia, £175,000 would buy you a three-bedroom renovated rural house with a hectare of meadows, according to Jackson-Stops.

In the Costa del Sol, £175,000 would buy you a two-bed apartment with private gardens at La Floresta in the Marbella district, or a two-bed apartment with communal swimming pool in Puerto Cristo on the eastern coast of Mallorca, according to Taylor Wimpey Espana.

Bing: find properties for sale in Spain

Portugal
While some estate agents are talking up the Portuguese property market, claiming that the EU bailout is actually a "good thing" for real estate, the figures seem to tell a different story.

According to the Royal Institute of Chartered Surveyors Confidencial Imobiliário (Rics/Ci) Portuguese Housing Market Survey, prices have fallen every month so far this year. Separate findings from Knight Frank show house prices fell 2.8% in the last year.

According to the Rics/Ci, the main concerns of Portuguese real estate agents and developers relate to the financial constraints felt in the market.

These concerns are being amplified by higher unemployment and political uncertainty - and the fact the Portuguese economy is sitting on a precipice.

"In Portugal, banks are finding it more difficult to get wholesale funding, which means getting a mortgage is also trickier," says Bien. "Rates are also higher than they were a year ago, and lenders require a bigger deposit."

Analysts do not expect much of an improvement for the rest of the year, but some point out that the fall in prices is slowing slightly.

In Lisboa Oriente, Parque das Nacoes, £175,000 will buy you a modern one-bed apartment that comes with a gym and common terrace right located adjacent to the marina. Alternatively, in Alcobaca, Leiria, it will buy you a four-bedroom villa with private swimming pool, according to PrimeLocation.com.

Bing: find property for sale in Portugal

Italy
Italy's prices have fallen, but not to the degree of other countries, with some suggesting prices are now between 5-20% lower than September 2008.

However, with mounting concerns that Italy may be one the next victims of Europe's escalating debt crisis, the property market is already suffering.

According to PrimeLocation.com, searches for Italian properties fell by 25% between the first and second quarters of 2011.

"The intense speculation as to whether Italy will be one of the next casualties to arise from the debt crisis is in itself enough to force these sensitive property markets into further decline," says Nigel Lewis from PrimeLocation. "On the upside, there may well be some great bargains to be had here, as it looks like a buyers' market at the moment."

However, Saviills' John warns that there is a very limited choice of lender.

"Most Italian banks are no longer lending to non-residents," she says. That said, although loans remain difficult to secure, interest rates are low.

In Ostuni, Puglia, £175,000 will buy you a three-bed detached villa within walking distance of the region's famous sandy beaches, while in Tuscany the same amount will buy you a two-bed semi-detached house with views over the surrounding hills and medieval villages, according to Jackson-Stops.

Also in Tuscany, £175,000 will buy you a four-bedroom restored townhouse in the village of Monteverdi with a courtyard garden, according to PrimeLocation.com.

Bing: find property for sale in Italy

United States
Data from the S&P/Case Shiller Home Prices Index shows that house prices have fallen by 4.5% over the last 12 months, and by 4.2% over the first quarter alone.

The market is still troubled because so many homeowners have poor credit scores, are in negative equity or are going through repossessions. Economists are warning people not to expect any immediate relief from the gloom.

Bodega paints a bleak outlook: "The ailing US housing market passed a grim milestone in the first three months of this year, posting a further deterioration that means the fall in house prices is now greater than that suffered during the Great Depression."

"The brief recovery in prices in 2009, spurred by government aid to first-time buyers, has now been entirely snuffed out, and the average home now costs 33% less than it did at the peak of the housing bubble in 2007," he added.

In recent weeks, there has been a stream of disappointing economic data, showing the ebbing confidence in the recovery of the US economy. This fragility, along with high petrol and food prices, are all surpressing activity in the housing market, says Bodega.

Furthermore, banks continue to demand high deposits from potential buyers, and are pressing on with repossessions against those who have fallen behind on mortgages, adding to the glut of unsold homes on the market.

"There is a very limited choice of lender in the US, and a huge difference between states," adds John. In Santa Barbara, California, £175,000, would buy you a two-bed apartment with tree-covered balcony. In the Naples area of Florida, though, it would buy you a three-bed house on a resort-type development, according to PrimeLocation.com.

Bing: find property for sale in the US

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