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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brandonlee10
brandonlee10 24 Jul 2017

The financial ramifications of the triggering of Article 50, the starting gun for Britain's departure from the EU, are far from clear. Buyers will be most cautious in London, given that buying a home in...

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IrisJ.
IrisJ. 19 Jul 2017

Great advice, but may I also add that when buying an already built home, make sure you do all of the proper inspections. Most importantly pest inspection because people tend to get surprised when they

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IrisJ.
IrisJ. 17 Jul 2017

The third point is, in my opinion, the most important one. People have become too inconsiderate and careless when it comes to rented properties. If a landlord wants to protect their property, regular visits...

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cornishalan
cornishalan 10 Jul 2017

Added to the cost of purchasing these village properties are the above average maintenance costs. Particularly where the property is a listed building or requires specialist building skills such as thatching...

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Jo Mullett
Jo Mullett 07 Jul 2017

Here in Swansea, known as the Japanese knotweed capital of the UK, it never fails to amazes me that people have no idea of the potential problems this invasive non-native plant can cause when buying or...

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NathanG
NathanG 05 Jul 2017

McDonalds, for example, have been purchasing their real estate on prime locations for years. If something happens to the company they'll have invaluable assets that will be able to save them. We might

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Jonah
Jonah 04 Jul 2017

Graham: surprised to see you cite the "extra tax liability" as capping out at ?560. It doesn't - the extra tax is exponential, as it is levied on the income (i.e the inflating level of rental income you...

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Dianne Griffen
Dianne Griffen 29 Jun 2017

Be very wary of anyone bringing you deals that they have ?found? and want to ?sell on to you? or ?joint venture? with you on ? you need a proper legal contract for this, involve a RICs surveyor to confirm...

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jason hadzikostas
jason hadzikostas 28 Jun 2017

The most important thing is a budget. Students have to manage their spendings in food, house maintenance, books and many other things. According to me, student Studios are the perfect option for them as...

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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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