Could overseas property be more attractive to UK purchasers in 2016?

Could overseas property be more attractive to UK purchasers in 2016?

With the UK buy-to-let market becoming more costly in April because of the UK Government’s proposed tax increases, overseas property and mortgage specialist Simon Conn believes buyers could be considering more seriously other international destinations in 2016.

The most popular places to buy abroad from the enquiries he received last year were Spain, France, USA, Portugal, Ireland and Italy. Interest has been growing in South Africa, although there are not many mortgages available, and Greece and Cyprus were also popular.

Spain

Spain has taken France’s crown as the number one destination for buyers. Spain is a very popular holiday destination and when people are staying there, they often think about purchasing, instead of renting or staying in a local hotel. Loan-to-value rates are now up to 70%. Just a word of warning to be careful what you are buying -  as the number of agents/developers in the market has increased dramatically, please ensure you carry out due diligence, including looking into their past experience and recent sales (for example, quality of build, delivery times etc).

France

Despite slipping to second place, France is still buoyant. Buyers are taking advantage of very low interest rates and mortgages are still available up to 80-85% loan to value. Before the recession, only the more expensive areas were popular, but currently all regions are now of interest.

USA

The USA has hung onto third place in the popularity stakes for the second year running. Enquiries for higher priced properties continue, usually in the $500,000 and above price bracket. New York, Florida and California continue to be the most popular places.

Portugal

Like Spain, Portugal has also seen an increase in the number of agents operating. There are higher loan-to-value mortgages available up to 80% loan-to-value. People have recognised the quality of the build, the lower density of properties in the surrounding area and the potential value for money.

Italy

Italy is still busy, with interest rates remaining low. However, the maximum loan-to-value rate is now 60%, having been at 60-70% last year.


Greece and Cyprus

There is still no lending available in Greece via Simon’s lending sources, unless the property is valued at €1million or above. It is good news however, that lending in Cyprus has now returned, with loan-to-value rates of between 60-70% and a minimum loan of €50,000. Please still be careful about local legal and title issues though.

South Africa

South Africa is very popular, even though there are concerns regarding the economy and civil unrest. Lending is still very restrictive, with only 50% loan-to-value if you are a non-South African national, or 70% if you are a South African expat. Interest rates are around 9.50-9.75% and mortgages are still only available in Rand.

Turkey

With its low priced properties, buyers are still enquiring about Turkey. Interest has waned in the last year, probably due to the troubles nearby, and therefore people have become more attracted to Western Europe.

Other countries where there is some interest include:

Australia and New Zealand

Both countries are popular for retirement and long term investment.

Dubai

More people seem to be going back to look at Dubai now, but there is still a glut of rental properties leading to lower rental returns. Purchasers are buying mainly for holiday, retirement and work purposes. Lending is restrictive and you may have trouble financing some developments, as banks may not lend on those properties.

Caribbean

No specific island is showing any particular interest and the Caribbean seems to be more attractive to North America and Canada clients rather than Brits. Restrictive lending is in place in certain Islands.

Thailand

There is less interest in Thailand and, similarly to the Caribbean, lending is restrictive. If you are a foreigner, you can only buy a condominium or apartment and are not permitted to buy land or houses.

Also worth a mention are Canada and Switzerland, which are popular with ski enthusiasts and for holiday homes. There is also interest in Canada for retirement properties.

Holland has a lot of interest from expats for future retirement and also work-related purchases.

In Eastern Europe, the more popular countries for non-UK buyers are Hungary, Poland, Croatia and Czech Republic. Properties are low priced, but lending is restrictive.

Simon’s top tip for 2016 is Germany, where interest is increasing, particularly for investment purposes in large cities. There are signs more lenders are coming to the market for foreign investment.

Be aware that if you are looking to buy abroad for investment purposes, the majority of lenders do not take into account rental income.  

Mortgages are based on affordability, your whole overall financial/credit record and, of course, the valuation of the property.

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Latest Comments

SecomTech
SecomTech 22 Jun 2017

AT Last...This was discussed years ago and there was a move towards landlords registering their bad tenants on a database..(can't remember where) It seems a logical step though our leaders will probably...

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Bertrand
Bertrand 02 Jun 2017

How about the Welsh Govt introducing a scheme to protect landlords against "rogue" tenants who are then taken to court for criminal damage to the properties they trash. Pretty unlikely I suspect and politically...

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AmberMorris
AmberMorris 25 May 2017

"Please don't pick a novelty tune-playing doorbell. They're not 'fun'. They're stupid." Laughed a lot to this. It's actually true, though.

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Oliver Conway
Oliver Conway 18 May 2017

Making a neat inventory is a good idea, but if the seller is not willing to provide it, can the buyer demand it?

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Bertrand
Bertrand 17 May 2017

First step to nationalisation of the private rented sector IMHO. Nanny state poking their noses into things yet again. I object, as a decent landlord, sometimes having to deal with some pretty awful tenants,...

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Izzy
Izzy 16 May 2017

This is such a great a post. I love the detail you've gone into. It's a very useful article for helping those who are looking at deciding which sector they would like to go into! When I first started investing...

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paul burnham
paul burnham 30 Apr 2017

Jeremy Corbyn's pledge that a Labour government would build 500,000 new council houses must electrify the general election campaign. Reliance on markets and the profit motive has brought huge housing-related...

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CommercialTrust
CommercialTrust 28 Apr 2017

Sadiq Khan?s announcement of an online database of landlords and letting agents who have been convicted of housing offences, appears on face value to be a variation of the already implemented Database

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warren
warren 26 Apr 2017

You're very welcome Mary! Glad you enjoyed them :)

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Mary Ward
Mary Ward 26 Apr 2017

Thank you for the wonderful ideas. First impressions can make or break a deal. It's sadly that many homeowners drop the kerb to create an off-street parking space.

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Tony Gimple
Tony Gimple 14 Apr 2017

I'm not at all surprised that so many landlords are still confused about what the tax changes really mean and how it will affect them. In particular, the blind rush to incorporation is leaving landlords...

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MH
MH 13 Apr 2017

You are right that the bank holidays are going to be spoiled in looking for the properties. But people who want to sell their property and looking for the better relocation, they can get benefits of this...

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