Spain continues to top the list of hot spots

British investors’ appetite for overseas property is still strong with one specialist reporting enquiries up by 37% so far this year compared with 2013. Spain continues to top the list of hot spots, accounting for more than half, 51%, of enquiries received from January to September, according to overseas mortgage firm Conti.


The volume of enquiries for Spain has, in fact, increased by a massive 95% when compared with 2013. France, in second place, accounts for 29% of enquiries received so far this year, followed by Portugal with 12%.

According to Conti, there couldn’t be a better time to buy, with the strong pound shedding tens of thousands of pounds off property prices in the euro zone. Sterling exchange rates had a bit of a bumpy ride in the lead up to the Scottish referendum result in September, but the dust appears to have settled and the pound to euro exchange rate is hovering near €1.27 at the moment.

Rewind to last summer when the pound fell to a low of €1.14, and the difference is pretty significant when you apply it to property prices. It means that a €200,000 property in Spain, for example, is now almost £18,000 cheaper, showing just how much difference the currency markets can make.

‘When you combine the strong pound with the low property prices to be found in many European property markets together with historically low mortgage rates, affordability is better than it has been in years,’ said Clare Nessling, director at Conti.

‘With buyers’ budgets stretching that much further, the purchase of that place in the sun could seem even more tempting, especially when you compare the cost with overheated parts of the UK market,’ she added.

Conti says that it’s vitally important for buyers to seek the right advice. Bitter experience has taught many overseas property buyers that scrimping on independent legal advice can effectively cost them their holiday home. Buyers should always go through the same process that they would follow if they were buying a property in the UK. ‘There’s nothing to be gained, and everything to lose by cutting corners and failing to carry out due diligence,’ said Nessling.

Advice from the firm includes never signing a contract that you don’t understand. If two versions are provided, i.e. English and local language, ask your solicitor to confirm the English version is a true translation, as you need to ensure it doesn’t contain errors, omissions or extras.

Obtaining a mortgage ‘approval in principle’ will confirm you can obtain the necessary funds before signing on any dotted line and prove to sellers that you’re a serious buyer. And it costs nothing.

Buyers should consider fluctuations in the exchange rate. It’s generally advisable for an overseas mortgage and the income used to service the mortgage repayments to be in the same currency, to avoid any exchange rate issues.

Buyers should also take independent advice from an English-speaking lawyer who is not connected to your seller, estate agent or property developer.

They ought to bear in mind that bills don’t end at the asking price. Lawyer’s fees, local and national taxes, insurance, and so on can often add at least a further 10% to your purchase costs.

Before proceeding with the purchase, ensure an independent valuation of the property is carried out, which should point out any problems.

If buying a new build property, people are advised to check the developer’s track record, obtain references from previous buyers, and look at comparable properties in the area.

They should also conduct thorough research about local facilities and transport. People gravitate to locations with a nearby airport, especially if it’s served by a budget airline. But remember there are no guarantees that cheap flights will continue indefinitely in one location.

Opening a bank account in your chosen country and, and setting up standing orders in your local bank account to meet local bills and taxes is advised. Failure to pay your taxes in some countries could lead to action by the authorities.