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

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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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Paul
Paul 25 May 2016

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Johna
Johna 20 May 2016

"Easier said than done" is what I would say. Of course, it would be more than great to have more in quality and affordability, but I do not trust talk anymore.. What is said is not what is happening.

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Johna
Johna 20 May 2016

in my humble opinion being fair like THE most important! I myself have had bad experience with unfair landlords... not to mention that I know how to do a proper end of tenancy cleaning since I am a fantastic...

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richardrawlings
richardrawlings 18 May 2016

NB - even if we doubled our commission levels in the UK, we'd still be by far the cheapest agents in the entire world.

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Agent_PeeBee
Agent_PeeBee 18 May 2016

Clueless. Someone needs to take these people's computers away from them so they can do no more harm than they already have.

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richardrawlings
richardrawlings 18 May 2016

Nonsense! The cost of selling a house nowadays has little bearing on the fees charged. Don't believe your own spin on this. Fees have spiralled down to pathetic levels in areas where weak agents have allowed...

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Simon Oliver
Simon Oliver 16 May 2016

The best solution is to buy a property that has built-in income generating potential: a nice house with a couple of gites in the grounds is a good start. In France, the rune of thumb is that one 2-bedroomed...

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WPD
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warren
warren 03 May 2016

It's enough to make me weep into my Pimm's :(

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james anderson 03 May 2016

The sad demise of the croquet lawn...

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