The recent so-called "credit crunch" is expecting to have a lasting effect on the overseas property market, according to analysts. Mark Leeman, investment analyst and consultant in the city of London comments "The UK banks which were more than happy to pump money into foreign property are re-thinking their strategy and this will have a huge effect on second homes in other countries owned by British people".
"It's getting harder and harder to gain a new mortgage because of the tightening of bank belts. That may be bad news if you need a mortgage for a house in the UK, but the effect on foreign investments will be much more significant".
Mark's comments tie in with my own investment experiences and the general impression I get from conversations with new purchasers of property abroad. Although it may take some months to have a real effect, owning a second home abroad will become a lower priority for all European banks.
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Already there has been a dramatic reduction in new mortgage application approvals in the UK, and in the last 3 months we saw the first drop in UK property prices in 13 years. I also believe the stats of the last decade, with its abundance of money in our pockets and banks willing us to buy more and more property, are about to change.
If you are a cash investor this may be good news for your property abroad business, however if you intend to borrow money (which most people do) then you're chances of obtaining a mortgage with a "normal deposit" have definitely reduced.
My advice at the moment would be to proceed of you have a deposit greater than 40%, don't buy outside the EU just now and if you're simply thinking of purchasing a property abroad then hold off for at least six more months until the true effects of the credit crunch begin to purvey the overseas property marketplace.
Credit Crunch Affects Overseas Property Market
Buying Property In Spain
Property Abroad - Buying Property In Spain
If you are buying property abroad the chances are you are thinking of or have considered Spain. Spanish property is by far and away the most popular choice for British people buying overseas property. The warm climate, friendly locals, excellent beaches and ease of access from the UK make Spanish properties a favourite with British property investors. This article outlines some basic but important information you should be aware of before you begin your search for a property in Spain.
Property In Spain - How Much?
How long is a piece of string? You may pick up a Spanish finca for a mere £50,000 or spend £250,000 on a plush Spanish villa. Either way decide how much you are going to spend BEFORE you do anything else. Whatever you do, don't get carried away as this may involve overstretching yourself and embroiling yourself in a property situation you cannot afford. If you decide your budget for a property in Spain is £80,000 stick to it. It's all too easy to get carried away when you view a property you love but can't afford. In addition, European lenders are less likely to tolerate defaults in payments than British banks.
Don't Buy A Spanish Property On Impulse
I recommend visiting any overseas property you are interested in at least three times before you put the wheels of purchase into motion. Take a video camera or even a still camera when you visit. Upon your return to the UK look at the pictures rather than go from memory. You'll be glad you did. Sometimes things may appear better than they are at first and believe me this has happened thousands of times with potential buyers of Spanish property. Once you recover from the initial "oh I just love it", take the time to think clearly, visit multiple times and photograph the property in full. Above all view other properies within your budget.
Have A Chat With Your Neighbours
This is another top tip before buying a property in Spain. Lets say you have found a potential overseas property within your budget and you have visited the property two or three times. Go to your neighbours and talk with them, find out about the area, its advantages and disadvantages and make sure you chat with a reasonable variation of people. I don't mean simply another British family next door that have been living there for two years, I mean real neighbours, including Spanish ones. There may be things about the area surrounding your Spanish property that you would otherwise be unaware of. For example, perhaps the local town is a little too far away, or the local school isn't up to scratch. Maybe your neighbours are people you wouldn't want as neighbours. Either way- talk to them.
Get Your Property In Spain Properly Inspected
It is absolutely crucial that you have your potential Spanish property fully inspected by a qualified surveyor before you purchase. I know this might seem like obvious information but believe it or not I have personally met people who have invested in property in Spain on the spur of the moment only to regret it at a later date. Get your structural survey done and make sure your property in Spain is what it seems. Be wary of people who stand to profit from faults with your Spainish property, such as builders, roofers etc. Use a surveyor.
Who Owns Your Property In Spain?
Find out who owns the property through legal channels, including any outstanding debts or liabilities connected with the property. Do NOT simply go on the word of a developer or vendor. A recent example has been the selling of properties in Spain, usually apartments, in buildings that have been erected without any planning permission. This is a current issue and the Spanish authorities are clamping down on these cowboy real estate dealers. The losers are going to be the owners, as these properties may soon be demolished with no compensation to the property investors.
Allow For Currency Fluctuation
If your property in Spain is £105,000 today in UK currency it may be a different price tomorrow due to fluctuations in the Euro/Pound exchange rate. Before you buy your property in Spain make sure you are fully aware of the cost at the time of purchase and build in a contingency fund to account for currency differences. It could be 3-4 thousand Euros difference within a couple of days. This way you avoid any nasty surprises when you purchase your Spanish property - especially if you have a limited budget for investment in a property in Spain.
Buying Abroad Advice
Property Abroad - Buying A Property Abroad
Buying a property abroad doesn't need to be a harrowing experience. In the 30 years I have been investing in overseas property most of the problems I have witnessed have been caused by the clients themselves. It usually involves dealing with an unscrupulous agent or foreign lawyer, taking the advice of friends or family rather than professionals or investing in schemes in countries outwith the European Union which often seem, and are, too good to be true.
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This page outlines some basic principles which you should adhere to when buying a property abroad. As I said in my introduction, don't assume you know everything or treat basic principles as being too simple for you. If you are serious about investing in overseas property these factors will be invaluable to you.
Deal with professionals. Make sure any lawyer or estate agent you deal with speaks good english and is fully certified with all the relevent local licences.
Make sure you understand everything. It doesn't matter how professional or even carismatic your overseas property agent seems, you MUST understand all aspects of your purchase. If you don't understand something, stop where you are until it is explained thoroughly to you. Its your property abroad - not theirs.
Do not assume things are the same as the UK. This is a very common mistake and one I have encountered many times in my dealings with overseas property. I have heard people saying "that would never be the case in the UK" so many times it makes me laugh. If you are buying a property in Spain or Turkey its obviously going to be different - they are different countries with their own laws. Get to grips with that fact and make sure you understand the law. In some countries the purchaser of the overseas property can actually inherit the debts of a previous vendor. Sounds crazy? Well thats the way it is - make sure you don't get any nasty surprises.
Be aware of all your legal fees for buying a property abroad. Again, this varies from country to country so be fuly aware of ALL costs. Set up a bank account in the country you are buying your overseas property in and try to pay as many bills as possible from there. Remember there may be additional fees or commissions to be paid in addition to regular property fees.
Buy your overseas property in writing. By that I mean never assume anything. All formalities, no matter how menial, must be put in writing. For example, lets assume you are buying a Finca in Spain. The seller promises to fix some tiles on the roof before the sale happens. It doesn't matter of he's a nice chap, get everything in writing.
These are basic points when buying a property abroad but at the end of the day many people overlook what may seem obvious to others. You may be thinking I am pointing out the obvious and yes I am! Take heed before you buy your property abroad!
Overseas Property - Finca
A finca is a smallholding of some description in the Spanish countryside. It doesn't have to be a farm or croft-style holding to qualify as a finca. It may or may not have olive groves, and orchard or a piece of arable land beside the main property. Basically as long as it is located in between towns and villages and has some sort of useable land (not development land) it could be classed as a finca.
Why buy a finca in Spain?
So now that you know what a finca is, why would you buy one? Purchasing a finca can be a shrewd and wise move if your plan is to buy a property overseas located in the countryside. Lets say you intended to purchase a villa inland in order to save money. What if your new overseas property was a finca? It may have olive groves, a vineyard or an orchard attached. Your finca could provide a valuable income in future years if you intend to say in the property full-time and you don't mind rolling your sleeves up!
Fincas and problems with a finca.
Some problems that can occur when buying a finca in Spain are the likes of water supply. Many Spanish fincas have their own well, which needs to be checked and overlooked, whilst some are on the mains supply. The same could be said for electricity. Make sure you consider these factors before you buy your finca or any other rural overseas property. You may be responsibe for any costs involved in accessing these utilities.
Finca popularity in recent years.
Twenty or thirty years ago it was almost exclusively Spanish people that owned and operated fincas. Back then they could be bought for low amounts of money because foreign overseas property buyers only saw the disadvantages. However in recent years fincas have become much more popular and therefore their prices have increased considerably. This is even more true because of the Spanish planning laws. Older fincas in less popular areas often have an abandoned or ruined property on site which can greatly speed up permissions to either renovate the existing property or erect a new dwelling.
Fincas - a final word.
If you are considering buying a finca in Spain please remember what the property is. Don't buy a finca simply to get your hands on a huge building plot. Failing to work the land or look after the orchards or groves could not only antagonise the locals but also the local planning authority. If you are wise and not afraid of hard work you will reap the rewards of running and owning a finca in Spain.
Overseas Property Advice
Overseas Property - Buying An Overseas Property
This is a follow-up article to property abroad considerations, posted last week. In this article I intend to point you towards a few key pieces of advice when buying an overseas property. Think of it as a basic checklist to consider before buying a property abroad or any overseas property investment.
Before you start ask yourself some basic questions about the locale you wish to live in overseas. Its not simply a question of buying any property in Spain and putting up with the elements of the area that don't suit you. You must research the location for your overseas property thoroughly.
Basic location considerations could be as follows:
Overseas property in a town/city or do you prefer life in the country? Think about it and compare it to your current living conditions. Its all very well buying a villa in Spain 40 miles from the nearest town, but if getting around is going to be a problem, forget it. On the other hand perhaps it is peace and tranquility you seek. Its best to decide on this before you begin your overseas property search.
A seaside overseas property or landlocked? Another factor in deciding your location, apart from town or country, is the proximity to the sea. A major flaw with British investors in overseas property is the "holiday syndrome" of being near a beach or popular area. If you are planning to reside in your overseas property full-time, or even most of the year, then remember living there permanently is a lot different from a two-week holiday in the summer. Overseas properties near the coast and especially beaches are becoming increasingly expensive whereas you may save substantial amounts by buying an overseas property inland. even 20-30 miles from the coast can make a huge price difference.
Is your overseas property near a town? No? Hmmm.... generally not a good idea unless you are planning on keeping your property abroad for life. This can make a huge difference to potential buyers of your foreign property in the future. Simply put, its a wise idea to buy a property abroad that is within one hour of the nearest town with reasonable facilities. Most people dont have a problem driving for an hour once a week or so, but if your property in Spain in a two hour drive down dodgy roads to get to the nearest supermarket, it may cause problems for future property buyers.
Does your property abroad have a big garden? Again, take this into consideration depending on whether you intend to sell your property in the future and combine it with your own requirements. You may want a large garden or perhaps you're not the gardening type. Many people, especially in the countryside, prefer a reasonable about of space around their home. However this should be taken into account for all properties, even if your overseas property is located within a built-up area. This is particularly true if you prefer to have/not have neighbours.
Public transport from your property. Perhaps not relevent to you, but to others it may well be. Is your Spanish property on a public transport route? Are you able to get around if your car breaks down? You may save money on more isolated locations when buying a property abroad, but this is how it is paid for in the future when you come to sell. It's also a factor that will affect your day-to-day life. For example, are our teenage kids able to get to the beach/town/etc without you driving them there? If they can't they may drive you round the bend!
How far to the nearest international airport? This is a crucial element with your new home overseas. The further away it is from an airport with UK flights the more you will save on your initial investment. It could also mean an increasing pain for you to drive 3 hours back and forth on Spanish roads every time you visit your overseas property. If its going to be a holiday home used 2-3 times per annum, then take the distance to the airport into account.
How far are the nearest holiday facilities? By holiday facilities I mean things like tennis or squash courts, swimming pools, parks etc. It will be more important to access these if you are either living full-time in your overseas property or renting the property abroad out to holiday-makers. Lets face it, if you rented a villa for 2 weeks in Spain wouldn't you like a pool or at least access to either a pool or the sea?
I have just scratched the surface with the basic points but they are all valid and should be considered in line with your own ideas before you buy your overseas property. They will change depending on your purchase and whether your property abroad is for investment, profit, a holiday retreat or a permanent home. Take these points to heart and talk about them before you buy your overseas property.
Property Abroad - Property Considerations
Property Abroad - Overseas Property Considerations
If you are considering buying a property abroad you probably have a fair idea of what you are looking for. Assuming you know which country you prefer and the location within that country, lets look at some more basic considerations before you buy your overseas property. For example, would you like to be near the sea or inland? Do you need access to schools and/or work in your new home or will your property abroad be for pleasure? When thinking about the sort of overseas property you'd like to live in its worthwhile being flexible. After all, buying a property abroad and living there is very different from going on a holiday.
The benefits of being flexible are evident in the following story which happened to a couple I know personally. Their dream of buying a property abroad wasn't as straightforward as they may have initially thought. Here's what happened...
Julie and Kenneth had a dream of buying an overseas property in Greece, not to have an annual holiday in but to live in permanently. They had two sons aged 10 and 14 and dad needed access to the main town for work, whereas mum wanted to be close to the beach and the shops. they chose the island of Crete as they had been on holiday there every year for eight years. Their plan was to buy an old traditional Greek house, spend two years fixing it up and renovating it, then moving to Crete permanently after completion.
Kenneth was convinced he could obtain an overseas property to renovate for less money, and after renovation would have a bigger house than their budget initially allowed. They planned to spend £50,000 on the property and £30,000 on renovations. Coupled with a £5,000 contingency fund their total budget came to £85,000. Due to work commitments in the UK Kenneth couldn't leave for two years although his boss granted him extra holidays to oversee the work on his new overseas property.
Both Julie and Kenneth expressed their love of older houses and especially the idea of having a traditional Greek house overlooking a beach and a beautiful bay.
During our conversation I asked if they would consider any other type of property and conveyed my doubts about their dreams and their realistic budget levels. In the end I suggested one more trip to Crete for another look around before investing in their property abroad.
Upon arriving in Crete they followed my suggestion and made an appointment with a reputable local property agent. After explaining their budget and requirements it soon became apparent it was going to be more difficult than they initially thought. The agent explained that traditional properties near beaches or overlooking bays were virtually impossible to obtain and certainly couldn't be purchased for the kind of budget available to them. However, he suggested they take a look at a brand new apartment complex near the sea that was recently completed.
Julie and Kenneth felt their dream of owning a property abroad was ebbing away and at that time a new-fangled concrete flat was the last thing they wanted. The Greek property agent took them to the complex and they quickly changed their minds. Not only was the new apartment finished to a very high standard, but the 12-unit complex had its own pool, sauna, gym and gardens. Upon entering the apartment their faces lit up as they saw the brand new kitchen, two spacious bedrooms and living area, complete with a roomy balcony and a view of the sea.
The agent also explained the benefits of not renovating a traditional house and having to deal with contractors, undertake legal affairs, etc. Since they could not actually live in the property for two years, the new apartment could be rented out to tourists in the meantime, generating a substantial cash boost. The cost of this new apartment in crete? Only £80,000 including all appliances. With a short walk to the beach and many facilities in-house, Kenneth and Julie were sold.
It pays to take all options into account when buying a property abroad and not to be inflexible unless you have a substantial budget. Julie and Kenneth found a maintainence-free apartment in Crete that was in-town yet near the beach simply by being open-minded. More importantly it helped make their dream come true of owning a property abroad.
Overseas Property - Before You Buy
Overseas Property - Before You Buy Property Abroad
There are many rules to abide by when purchasing a property abroad, but one of these rules is golden. In fact it's so golden its sheer shineyness almost blinds you. What is this golden rule?
Always make sure all property, people and prospects you deal with are legitimate!!
What am I rambling on about? Alright, lets imagine this scenario. You and your wife have invested all your life savings into an apartment on the Spanish coast. It was purchased in good faith and you are extremely pleased with your little slice of heaven. Your venture into buying property abroad has paid off and everything seems great.
Then one day a letter falls through your door. Its from the Spanish authorities. It turns out the developer has built your apartment block without planning permission and the authorities are refusing to grant it retrospectively. What does this mean? It means:
1. Your overseas property is illegal
2. You may have no rights
3. Your property may be demolished. Thats right - DEMOLISHED!!!!!
Can this really happen? You bet it can, and the Spanish authorities are cracking down on apartment buildings, villas and other properties that have been erected without permission, sometimes in protected areas. Before you buy your property abroad remember the golden rule above before you are caught in the middle of a ruling between the developer and the authorities.
If you have realplayer on your computer I highly recommend watching the BBC programme "Real Story" which has run an excellent investigation into this very topic.
Watch "Pain In Spain" with realplayer NOW
Visit the "Real Story"on the BBC website.
Don't let the programme scare you off - it simply demonstrates what could happen when purchasing a property abroad and it illustrates my point exactly.
Finally if you are dealing with lawyers, agents, property developers and anyone else in foreign countries - CHECK THEM OUT! Don't settle for someone simply because your friend used them - perhaps they diddled your friend too and he doesn't even know it!
Investing in a property abroad is a serious business, so treat it that way and be cautious.
Property Abroad - The Author
Property Abroad - The Author
Thankyou for visiting this small but rapidly developing web blog. Bookmark it now as I add articles and information every day and the site is constantly updated. Now who am I?
I am a successful property developer from the United Kingdom with 30 years of property investment and development under my belt. Now living in Scotland I have stepped back from industrial and commercial development to concentrate full time on my own overseas property business. My portfolio consists of over 90 properties abroad, mostly in Europe, and a dozen land developments. I never talk about my company or name, or my exact properties to avoid affecting current business I am doing.
Buying a property abroad can be daunting, to say the least, and that is why I have decided to incorporate this blog into my daily routine. I am tired of watching people losing their life savings or falling victim to foreign property laws or property developers. I may own a considerable amount of property abroad but all my overseas properties have been obtained with the highest of business ethics and honesty.
There is no charge for the information on this website, and the only subscription is to my RSS feed which is free and keeps readers up-to-date. If you are considering buying a property abroad there may be many factors you have not considered or given enough thought to. I would suggest keeping the following in mind when reading through this website:
- Keep an open mind and be open to suggestion
- Remember nothing is too simple to consider
- Dont assume you know it all - nobody does
My goal is to able you to access information that either eludes the regular buyer and investor in overseas property or simply may not be available due to lack of experience. Often buying a property abroad is the largest investment many people will make outside their own home in the UK. Let me assist you with your dream of owning a property abroad. Bookmark this site now.
Property Abroad - Living Overseas
Property Abroad - Life Overseas
Lets assume you are looking at the possibility of buying a property abroad. Lets also assume you intend to live, for at least part of the year, in your overseas property. There are some basic fundamentals that should not be forgotten. Before you go anywhere do some research on the country you are considering buying an overseas property in. Think about it...
Is your property abroad within the European Union?
If it is, you have the protection of the EU and its laws. This can make a big difference in your life. If you accidentally fall upon some trouble or hard times, offend the wrong person or have legal difficulties, the fact of being in the EU or not will make a huge difference.
Your Property Abroad - Their Country 
Thats right, its their country. The boom in overseas property purchases in the last two decades has led to various situations in different countries. For example, there are parts of Spain that have so many British immigrants you would hardly know you were in Spain. Pubs with Union Jacks and dartboards, fish and chip shops and English flags everywhere are just some of the signs. Guess what...it IS Spain! Regardless of the situation, respect the country your property abroad is located in.
Overseas Property - Why Live Abroad?
Are you going abroad to complain about all the things from back home they dont have? Believe me, in my journeys around Europe and business dealings, I've encountered this attitude many times. How about moaning about the country you're in, or hammering home to all your visitors all the negative aspects? If these are things you may do, I suggest you put your dream of a property abroad on the backburner. Would it not be wiser to love the country you have purchased your overseas property in? Think about it.
Property Abroad - The Dream
There are many reasons to dream of living in another country and owning an overseas property. You may be driven by cultural, social, climatic or personal reasons, but whatever the reason you are not the only person to have this dream. As our population swells with migrants from other places its worth remembering that an estimated 200,000 Britons leave the UK every year for foreign countries. This has led to a huge demand for property abroad, including overseas property to purchase, rental properties and plots of land for self build projects. The highest demand for British people seeking property abroad is in Europe, particularly in Spain, France, Turkey, Greece and the emerging eastern European nations.
In some cases people are buying property abroad for investment purposes in countries such as Bulgaria and Romania. These marketplaces will be covered in this site, but for now let's ask the basic question:
Why buy a property abroad?
Here's a common scenario. Bill lives and works in London and embarks on his annual holiday to Spain. He has rented a villa overlooking the sea for his family for two weeks and they can't wait to get there. After a day or two to settle he relaxes by the pool with his wife and family, the sun is shining and all the drudgery the daily grind vanishes into memory. He thinks about how much he dislikes his job, how bad the weather is at home, how crime is on the increase and the cost of living in the UK. He sips his pina colada and says to his wife "wouldn't it be wonderful to own our own property abroad".
You may laugh but the dream of owning overseas property often starts in this way. We may be enjoying ourselves so much we simply want it all the time. In the past those feelings would have been restricted to the holiday, but changing times and increasing property values in the UK mean owning a property abroad is no longer out of the question. It is a definite possibility.
Perhaps you have had a similar experience, or perhaps you have been seduced by the many television programmes that promote living abroad or owning your own overseas property. Whatever your reasons, and however your own dream began, now is the time to put practical considerations first and decide if your dream of owning a property abroad can become a reality.
Property Abroad Introduction
Welcome To "A Property Abroad" and thankyou for visiting!
A property abroad - many of us have that dream especially when the weather is cold and your mind turns to warmer climes. But what is involved in making the dream happen? What things need to be considered before moving abroad? Is it possible or simply a pipe dream? All these questions, issues and more will be addressed in this blog. I recommend you bookmark this website now and check back regularly for new articles and information.
A Property Abroad is here to provide you with unbiased advice on all aspects of buying a property abroad and living in a foreign country. I update my site on a daily basis and I never charge for information and articles. Not everything will be relevent to you but some articles may open doors to ideas, thoughts or considerations that will affect your decision.
Before you purchase or rent your overseas property take the time to research the country you are going to, the processes involved in purchasing property in that country and the differences in lifestyle you will experience while living abroad. This site will become invaluable in your journey to owning a property abroad, providing articles on all these matters and more.
Use the contents list to the right to navigate through the website. You may choose to read only what catches your eye but I recommend reading as many articles as possible. Don't let your dream of owning or renting an overseas property fade away - by reading through the articles on this site you have taken the first step to your property abroad!