Should you buy an overseas property in 2020?

Moving abroad post-Brexit, buying a holiday home, or trying to beat the UK housing market? We take a look at the countries where your property could grow the most in value.

Hungary saw the biggest property boom last year, according to analysis from Knight Frank, with other European nations filling the top five places.

Australia performed the worst of the 56 areas tracked, according to the property consultancy's research.

Here, we look at how Brits' favourite locations for holiday homes are performing, and how buying overseas property works.

Should you buy in Britain's favourite overseas areas?

According to Rightmove's overseas director James Stewart, many of us are still searching for a place in the sun.

'Buying a property abroad remains a dream for many people living in the UK, especially places by the sea, near the sand and bathed in sunshine.

'Whilst there is still some political uncertainty people are still buying properties, with Brits buying more properties in Spain more than any other country.'

France and Portugal are also popular, according to Rightmove. In terms of return on investment, Portugal is your best bet of these three, according to the latest Knight Frank Global House Price Index.

Average property prices in Portugal grew by 7.8% in the year to September 2019. Conversely, prices in France and Spain grew by just 3.2% and 3.1% respectively.

Still, the biggest property price growth has come in European countries that are traditionally less popular with UK buyers.

Where in the world did house prices grow the most?

Property values in Hungary have grown more than anywhere else, with Luxembourg, Croatia, Slovakia, and Latvia also making the top of the table.

These countries saw growth of 9% -15.4%, compared to the international average of 3.7% - the slowest rate for six years.

_{Source: Knight Frank House Price Index Q3 2019}

Hungary's 15.4% increase would make a huge difference to a property's value. If you'd bought a £100,000 property in Hungary 12 months ago, it would be worth £115,400 now.

But there's no guarantee that these countries will see the same level of growth again next year, as you'll see by reading the bottom of the table.

Where did house prices fall the most?

At the other end of the scale are the year's worst performers, many of which saw decreased property values over the period.

Many frontrunners from previous years saw less growth in the past 12 months. Slovenia and Malta - both in last year's top five - dropped to positions 18 and 22 respectively this year.

Most dramatically, Hong Kong was nearly bottom of the table with a 1.5% drop in property values, down from first place in 2018 when it had 15.7% growth. The difference could be due to political upheaval in the city.

Australia saw far and away the biggest average decrease in property values, with a steep 7.4% drop. A £100,000 property purchased in Australia 12 months ago would be worth £92,600 today.

_{*Provisional; Source: Knight Frank Global House Price Index Q3 2019}

The huge differences between Hong Kong's performance in the past 12 months and the 12 months previous show just how volatile the international property market can be.

If you're buying to make a profit, it's important to keep these risks in mind. Market growth depends on a huge number of factors and unpredictable events that you can't prepare for by reading about annual trends.

How will Brexit impact buying overseas?

The 31st January Brexit date is more certain than ever now MPs have voted through the Withdrawal Agreement Bill. But the exact effect it will have on overseas mortgages is still unknown.

Brexit's impact on the UK housing market will also make a difference if you're planning to pay for a holiday home via remortgaging.

• Find out more:what will Brexit mean for house prices?

Buying an overseas property: what you need to know

If you do decide to buy a home abroad in 2020, you'll first need to find listings. Popular choices are:

• Online property portals- websites like Rightmove and Zoopla have overseas sections covering many countries
• Local estate agents - find these in the area you want to buy in to get tips on local neighbourhoods
• Exhibitions - visiting shows like A Place In The Sun Live can help you find out about destinations and meet lawyers, advisers and developers
• Developers - these will be selling newbuilds or unfinished off-plan properties

Some UK banks offer mortgages for overseas properties, but you can also arrange a mortgage with an overseas lender. See our guide to overseas mortgages for more details.

• Find out more: buying overseas property