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Have you ever dreamed of owning a home in the sun?
Well, believe it or not, it is a dream that has come true for many. People have bought apartments or villas in places all around the world, including Cyprus, France, Greece, Italy, Portugal, Spain, Turkey, the USA, and even more exotic places, such as the Caribbean, Cape Verde, Dubai, Morocco and Thailand.
Owning a property abroad is no longer just for the rich and famous. If retirement is beckoning offering new opportunities, then buying a property abroad could be within your reach.
Since 1993 when business barriers came down across Europe, foreign travel has escalated, opening our eyes to life in the Mediterranean and the possibilities of having a home there or beyond.
"But look before you leap is the message for anyone contemplating buying a place in the sun," says Simon Conn, an Overseas Property and Finance specialist based in Hove in the UK, who has been involved in this industry for over 30 years.
"An alarming number of people act in the heat of the moment on their holidays and commit their life savings impetuously to a dream villa, apartment or timeshare only to find that they have made a dreadful mistake when they cool down. Precautions that they would normally take when purchasing a property in the UK, seem to disappear when it comes to a property outside of their home country."
The first priority is to think long and hard about the costs involved.
There are several methods of raising the cash for a foreign home, including possibly re-mortgaging or raising a second mortgage on an existing property, so you don't have to 'sell up' in the UK to pursue your dreams. Alternatively, it may be possible to raise finance secured against the Overseas Residential Property and funding is possibly available in over 50 countries – see website below for further details*.
If you are currently British based selling to move abroad permanently, a short-term Bridging Loan secured on your UK property could also speed up the purchase.
Think about combining your cash with friends or family, as it could mean that a villa with a pool is possibly in reach rather than just an apartment.
However, remember that the bills do not end at the asking price. Lawyer's fees, taxes, travel expenses and insurance must all be met and can often be more expensive abroad.
Among the more exotic costs of buying abroad are money transfer deductions, service charges for expensive shared amenities such as tennis courts, pools and golf courses and fees for translating documents into your own language - a must if you are to accurately check the small print in a contract. Also be sure that any translation is a true translation of the original!
If you are buying on a development, ask your agent how long they have been established and what other properties the developer they represent has built. Ask for the names and addresses of other customers the agent has advised so that you can check up on their claims and service – there is no harm in obtaining references.
Make sure you see the older properties on the development, not just the gleaming show of new homes of the latest building phase. It is a good way to see how competent the builders are and you can often spot real bargains among older properties especially in the current market.
A good ploy – especially in these economic times - is to get as many different quotes for the same property as you can for your dream home. Variations in price for similar properties in the same development may emerge as you do the round of agents at a resort.
Keep an eye out too for those properties that come with special discounts, with extra amenities or other perks such as a year's free membership of a nearby golf course. The rule is not to be bulldozed into signing anything or parting with cash before you have had a chance to think or check into the legitimacy of the seller. If it is very cheap, question why.
If possible choose a firm of lawyers with representatives both in your own country and abroad. It will prove much cheaper buying your home if you can avoid endless international telephone calls and air travel to sign documents.
A local lawyer can check that your holiday retirement home is on land legally acquired, is free of owed taxes or outstanding service charges and is connected to the water and power supply lines. Cases do exist of people innocently buying properties built in restricted military or conservation areas, or having to pay for all too temperamental generators or overhead power lines just to have light and hot water!
A lawyer will also study your contract and advise you of any pitfalls it may contain.
Open a bank account in the country you have chosen and ensure you get a certificate of importation for the money coming in from your own country. This will make repatriating your cash much easier if you decide to sell up at a later date.
Set up standing orders in a local bank account to meet bills and taxes. If you fail to pay your taxes in some European countries, such as Portugal and Spain, the courts could seize your property.
Include your home in a will that has been translated and officially recognised according to the law of the country you have decided to buy in. Failure to do this can lead to highly expensive legal wrangles for your executors.
"Buying a holiday home abroad is probably the fulfilment of many people's greatest ambition," said Simon Conn. "There are many reputable agents and developers around, but a bit of summer madness can jeopardise a lifetime of saving. Planning and lots of caution are necessary if you are to avoid getting stung in the sun."
For further information re lending and any advice/assistance regarding any points made in this article, please contact Simon Conn, Overseas Property & Finance Specialist. Contact details : www.simonconn.com ; E-Mail queries to: firstname.lastname@example.org ; Telephone: +44 (0) 7739 033266; SKYPE: slc5282; Twitter: @simonlconn
Content credited to: Simon Conn Overseas Property & Finance Specialist July 2013
This report indicates that many applicants may need to consider their online behaviour prior to applying for an overseas or UK-based mortgage.
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