Countries such as France, Spain, Turkey, Italy and the US remain popular places with UK investors in which to purchase property.
Typically, it is people who have retired or are moving families abroad that buy property overseas. Yet, this has changed recently as first-time buyers find it increasingly difficult to get onto the property ladder. Properties overseas can be cheaper, but do not necessarily increase in value as much. Buying abroad is potentially a great investment opportunity with the prospect of higher rental yields.
It is important that investors do some research though and remember the purpose of the property purchase. And this is where brokers experienced in overseas mortgages can really come into their own.
Working with a mortgage specialist
Each country has different rules regarding property purchases, therefore, an experienced broker is worth their weight in gold. Dealing with a UK-based international brokers means the investor is protected by various regulatory bodies.
For an investor buying property in the UK, the process is complex enough; for overseas transactions, an expert is especially vital.
International brokers understand local property markets and regulations, which is useful because it can be confusing especially if the investor isn’t familiar with the local language.
Most investors will use a UK-based lender who offers overseas mortgages. However, the criteria could be more restricted, and they may not have the local market expertise.
Brokers with knowledge of the region will make the process straightforward for investors but there are some fundamentals that advisers need to discuss with their clients before diving deeper into the funding process proper.
Getting started
A client has decided to buy a property overseas. What next? Well, of course, UK property websites and estate agents can offer help and doing research is crucial.
If you’re like me, when you’re on holiday having a quick look in the estate agent’s window (usually, with the kids looking for the house with the biggest swimming pool), the Association of International Property Professionals (AIPP) can give details of local agents in various countries across the world.
In addition, overseas property exhibitions can be useful events to find out about overseas properties and meet developers.
What investors need to consider
Buying property in a different country can be lucrative but presents a set of challenges. There are tax implications to look into, so finding a lawyer experienced in overseas purchases, is important.
They can help understand any specific requirements or licences that are needed depending on the purpose of the property being bought.
Together with currency fluctuations, interest rates can vary dramatically depending on the country where the property is being located. Investors need to be prepared for this.
Lastly, investors need to be aware of scams – buyers have been duped before by overseas developments that never get built.
