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

MBM Homelets
MBM Homelets 23 Mar 2017

Although this is a very positive step, there is little or no guarantee of the standard of workmanship employed by the tenants. We have had experience of a professionally decorated property being ' painted'...

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ajay
ajay 21 Mar 2017

How is the "robust evidence" looking now?

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NathanG
NathanG 20 Mar 2017

I've been watching the series so far and am completely baffled by the cases that were presented. Though, I don't think that we can protect ourselves from every scam possible - it will just make the scammers...

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Landlady14
Landlady14 01 Mar 2017

You would think so Niraj Shah! My experience only proves that there are varying qualitiers of professional in all aspects of property letting. None of the ones I have dealt with, from letting agents to...

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Mark
Mark 01 Mar 2017

Thanks for this article. Hopefully one day everybody's lifestyle will be eco-sustainable.

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Ben Taylor
Ben Taylor 28 Feb 2017

I was convinced that London was the most expensive!

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Alan Read
Alan Read 28 Feb 2017

Australia are leading the way in this I think. The trouble with Britain is we don't get enough sun to make use of solar power.

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James Powell
James Powell 27 Feb 2017

This is a very good news.

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DanHumphreys
DanHumphreys 27 Feb 2017

It sounds like a good idea. Anything to help the younger generation get a foothold.

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Matt
Matt 20 Feb 2017

Is this fake news?

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Matthew Hollywood
Matthew Hollywood 07 Feb 2017

Matthew Hollywood - Director Mishon Mackay Land & New Homes - Brighton The shortage of New Homes is in part effected by the lack of land sales. Land sales are held back because there is a disparity between...

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CommercialTrust
CommercialTrust 30 Jan 2017

Hi Graham, Would be interesting to see the above figure calculated against an investment via a Lt Company /SPV structure and if the investor found themselves pushed in to the higher tax bracket. Mortgage...

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