(1888PressRelease)
February 23, 2007 - This is now the lowest rate of inflation since March 2004, when the socialist government claimed a shock victory in the national elections, and is being hailed as a major achievement for a country that historically suffers from a volatile retail price index.
By contrast, the UK's inflation rate is a whole percentage point above its target of two per cent and the three interest rate rises in six months at home indicate that the Bank of England's senior economists are worried that the cost of goods could continue to increase above the desired rate.
This means that Britain's property has also been increasing in price rapidly, such that one square metre of apartment space in London's prime locations is now the second most expensive in Europe at €14,522 (£9,684).
Meanwhile, a similar area in Madrid, which is one of the most expensive locations in the country, costs just €4,000 (£2,667).
Although inflation is clearly a factor in the difference in price between the two countries, this demonstrates that Spanish homes are on the whole much cheaper than their British counterparts.
New data released today from property portal Kyero, reported by Easier, reveal that most Brits go to Spain in pursuit of a property with a budget of just €50,000 to €150,000 (£33,000 to £100,000).
However, with the average asking property price now at €245,000, these figures reveal some interesting trends on the Iberian peninsula. The most likely reason for this is that Brits are now going abroad to find smaller apartments close to the beach rather than the expansive countryside villas that are traditionally perceived as the first choice for the Englishman abroad.
Another reason for this disparity between average asking price and the budget of holiday home seekers could be the excessive supply now found in Spain. Since the property boom of the mid-nineties and early this decade, the country has been hit with construction fever, turning it into more of a buyers' market.
Thus, when a high asking price is requested at the estate agents, investment savvy Brits are adept at forcing the cost down so that it becomes manageable to their personal finances.
