Emma Britton And Rosa Prince/The Daily Mirror

First-timers buy abroad because UK is too pricey

YOUNG Britons priced out the UK housing market are buying a property abroad and renting it out, a survey revealed yesterday.

Tens of thousands of first-time buyers termed the "jet-to-lets" are investing in Europe and America because they can't afford a mortgage at home.

The news comes as John Prescott today reveals a plan to help young people get on the UK property ladder.

The survey of 4,000 people showed 47 per cent of the 18-29 age group plan to buy overseas.

Sixty-four per cent of those will be first-time buyers and 81 per cent of this new generation will let out when they are not there. Two per cent in the age group already own abroad.

Overseas buyers spend an average £101,000 - UK house price average is £160,000 - but most stay in Britain, either renting or living with family or friends.

Forty per cent of all Brits plan to buy abroad with Spain the favourite country followed by France, America, Italy and Portugal.

Simon Burgess of Oceanico Developments which ran the poll, said: "UK property prices are prohibitively high and the rental market is near saturation, so it's natural investors tend to look abroad.

"Property prices are lower, capital appreciation is healthy and the lettings market is strong. The benefits are two-fold because you get a place in the sun and generate income to cover mortgage costs by letting it out," added Simon, whose company sells homes on the Algarve in Portugal.

Deputy Prime Minister Mr Prescott will today unveil a plan to build £60,000 starter homes for first-time buyers.

Public sector workers are to be offered low-interest loans.

First-time buyers pay an average £1,300 in stamp duty.

A Treasury source denied reports the threshold people start to pay the tax is to be raised above £60,000.

"Mr Prescott and the Chancellor have not been discussing stamp duty," the source said.