Bargain property prices and historically low interest rates are putting Brits ahead in the overseas property race, says Conti’s operations director Clare Nessling.
“With the endless stream of doom and gloom stories about the economic downturn, you could be forgiven for thinking that the nation’s dreams of owning a property abroad have totally dried up.
Not so. Despite the UK property slump and the struggling pound, the overseas property market is alive and well for British investors, and it appears that more and more of us are seeking a little slice of life overseas.
According to a recent Mintel Research report, one in three Brits is now contemplating emigration.
And a quarter of us are considering investing in a holiday home, according to the recent Holiday Lettings’ Insights Report, with Spain being the second most popular location being enquired about by prospective holiday let buyers, after the UK.
There have also been reports about how the eurozone debt crisis is scuppering UK buyers’ hopes of securing an overseas mortgage.
But bargain prices and low interest rates mean that buying property abroad may never have been more affordable.
So just how easy or difficult is it to finance the purchase of a foreign home?
The answer may be more positive than you expect, but just how easy it is does depend on where your clients want to buy.
The most popular destinations amongst our clients are still France and Spain, both of which come with easy access and good rental opportunities.
Enquiries for both locations have increased considerably over the last three years, as investors continue to stick to locations they know and trust.
Turkey and Portugal area still popular too, while interest in Australia has also been creeping up recently.
Mortgage availability
Despite the recent banking crisis and the subsequent turbulence unleashed on the UK mortgage market, overseas mortgage providers have a healthy appetite for lending to foreign investors.
In addition falling property prices, in some cases by up to 50%, and historically low interest rates are making it much more affordable to buy overseas property.
The French mortgage market has remained very calm throughout the global downturn, primarily due to its financial system having been more cautious in the past.
It currently offers the widest range of finance options and best available rates in Europe for UK buyers, and as it’s in a relatively secure situation, loan to value ratios are still high and it’s quite normal to be able to borrow between 70-90% of the value of a property.
Rates currently start from just over 2%.
In Spain, mortgage availability is surprisingly good, despite the negative reports about its property market.
Maximum loan to values are still around 65-70%, although smaller deposits are possible in areas where house prices are more resilient, such as the Balearics, the Canary Islands, Madrid and Barcelona.
Last month, sales and marketing manager at Taylor Wimpey de Espana Marc Pritchard highlighted Spain’s enduring appeal among holidaymakers, noting a predicted influx of tourists in 2012 is good news for the country’s real estate industry.
He singled out Alicante as one area to watch, thanks to the growing number of airlines flying into and out of its airport.
