Buying a Property Abroad

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Buying a Property Abroad - what's it all about

The past 4 - 8 years have seen a tremendous increase in the interest, purchase and hype of buying property abroad. The late 90's and early part of the 21st century has seen house prices surge in the UK to record heights, this together with the ever increasing coverage of the low cost airline destinations has given the average man in the street the excess equity in their existing homes and easier access to be able to think about buying and perhaps living overseas.

Buying property abroad

We've probably all been on a foreign holiday to some exciting destination, be it Europe, The Americas or even further afield and admit it whenever we've seen a local estate agent we always make a beeline for their shop window if not to compare the prices to back in the UK then certainly to see how and what we could afford - we've been doing it for years without really considering the possibilities.

4 years ago the number of overseas properties owned by people from the UK hovered at around 170,000. Now there are over 1million Brits owning second homes in Spain and France alone, and figures from the Office for National Statistics recently revealed that around 200,000 Britons travel on holiday every year often dreaming of buying property abroad with the intention of staying for a minimum of 12 months.

The main question we at are asked by investors and holiday home buyers is "where should we buy"? A difficult question to answer because every person's idea of owning an investment property or holiday home is completely different. We have a selection of questions that we ask client to consider when thinking of buying property abroad which include:

  • Budget - how much do you want to or can you spend. Do you need a mortgage or finance?
  • Location - is location important for you? Beach, countryside or town?
  • Use - personal for holidays or purely investment or a bit of both?
  • Access - is getting to your property easily and cheaply important to you?
  • Employment - will you need to work what is the employment situation?
  • Schooling - do you need to consider such things as schooling for your children?
  • Size - will a one bed apartment be big enough or do you need to consider a 4 bed town house or villa?
  • Rentability - is it going to be a necessity to rent your property out to help with mortgage payments?

Although we receive many enquiries every month no two enquiries are ever the same and as such we treat each enquiry on a personal basis.

What about the legalities

Buying property abroad can be relatively straightforward - there's nothing really complicated as long as you follow instructions and use a reliable legal representative - whether they are from the country concerned or from the UK - it will make you feel more at ease and will help things to run smoothly. We feature various guides and books as well as resources on buying property abroad on our website and apart from various little peculiarities in certain countries most overseas property purchases can run smoothly.

In association with the Foreign and Commonwealth Office and our partners Buy Association we would like to bring you this video guide to buying property abroad.

Overseas Mortgages

Financing your overseas property is a lot easier now than it was a couple of years ago. Mortgages for buying property abroad can be arranged through high street banks like the Abbey National, Nat West and Barclays. However, you may need to look at specialist lenders for new and emerging countries like Turkey, Bulgaria, and Croatia etc.

Consideration should also be given to obtaining a mortgage in the country that you are buying in - things like euro mortgages can often work out cheaper than UK lenders but be aware of the changing exchange rate. Typical loan to value %'s can range from 60 - 80% depending on the country.

Holiday Home Insurance

As with all major purchases, insurance must play a part in your overall budget plan. We would strongly recommend that adequate property and contents insurance is taken out to cover your investment as it grows. Although you don't anticipate any problems arising with your new home you certainly want to ensure that your investment is covered against loss and damage.

Although there are a number of UK based companies that will offer holiday home insurance - you will also find that there are local companies able to offer similar coverage in each country.

Most of us here in the UK are already home owners and there exists a continuing strong demand for our little piece of England. However, there exists a growing sector of young people who are unable to climb on the UK property ladder because of the high cost of entry property prices and as such are entering the overseas property market as a means to secure some foot holding on an emerging property market.

Types of Properties we Feature

With over 50 countries covered in our property database, the prices of properties for sale in the areas we cover can range from a plot of land in the Bahamas from £2000 right up to a country holiday complex in Tuscany for over £33 million. Typical property prices in the likes of Romania stand at around the £10-15,000 mark for a decent property in the outlining areas whereas £5,000 + will get you a rural property requiring renovation and upwards of £30,000 will buy you something very near to the city of Bucharest.

Our Tips on Buying Property Abroad

The property market in Poland is our tip for rapid future growth as we consider the country to have the best prospects of all current EU members.

There are a huge number of international companies, such as Tesco's and GSK, beginning to set up offices, shops and warehousing in the country - this together with over EUR70 billion of European funding earmarked for the country over the next 8 years or so can only indicate the anticipated growth in employment, housing and infrastructure. Together with our Polish partners we are currently busy identifying new opportunities within the country and will soon be marketing off-plan developments in Poland throughout our massive infrastructure of websites.

As we become more and more daring in our ventures of overseas holidays then the great British public will continue to conquer new and exciting areas of the globe in which to lay their foundations of a holiday home or indeed a permanent residence abroad.

Wherever you are thinking of buying abroad its always important to follow a set procedure and conduct the right checks before you commit to anything. Be aware and do your homework on the area and the country concerned.

Here are just a few tips to remember when looking to buy a property abroad:

1. Never sign a contract that you do not understand (for example - if it is in a foreign language).

2. Always ensure that you seek specialist advice from independent Solicitors, Architects and Surveyors before considering a purchase overseas. They should be proficient in your chosen country's laws and processes and also know the specifics involved in buying a property there.

3. Ensure you do not inherit a debt on the property before you purchase, which a solicitor should be able to check - ie: If the developer has borrowed money to build the development and this amount has been allocated against each plot as additional security to the developer's bank.

4. Always give yourself a `cooling off` period if you see a `must-have property` and are tempted to put down a deposit there and then.

5. If you are arranging finance on the property, ensure that this is stated in any contract and you have an 'opt-out clause' if the loan is not agreed (which will ensure any deposit paid is refunded).

6. Try to arrange your mortgage finance 'in principle', before agreeing to purchase the property, or before signing any contracts and paying over a deposit.

7. Arrange your mortgage in the currency that you earn in where possible, unless you are going to receive rental income from that property in the local currency and then this may be a possible alternative option, dependent on the lender's criteria.

8. Think about combining your cash with friends or family: it could bring a Villa with pool within your financial reach, rather than simply an Apartment.

9. Check with the Estate Agent or vendor that you are aware of the costs charged by the legal and government authorities for purchasing a property in your chosen country.

10.Open a bank account in your chosen country and ensure you get a Certificate of Importation for the money you bring in from your home country.

11.Set up standing orders in a local bank account to meet bills and taxes. Failure to pay your taxes in some countries, such as France, Portugal and Spain, could lead to court action and possible seizure of your property.

12.Remember that bills do not end at the asking price. Lawyer's fees, Taxes, Insurance etc must all be met in your host country and can often be more expensive.