Buying a Property Overseas. Part 1

by Mark Johnston

Buying a Property Overseas. Part 1

It seems that even in the current economic climate buying a property abroad is more popular than ever with increasing numbers of people purchasing a holiday home.

At one time buying a property abroad was considered to be something only the ‘well off’ did. However in recent years we have seen a rise in house sales overseas.

Rather than investing in what is at the moment a ‘volatile’ stock market or leaving money in dormant low interest savings accounts it seems that people who are retired could potentially benefit from investing in property abroad to either rent out and live on the income or even move there and enjoy a better standard of living.

However, it now seems that it is not just retirees who can benefit from overseas properties. As first time buyers at the moment see their dream of owning their own home in the UK getting further and further out of their reach, it is no wonder that they look to buy abroad.

Although those looking to buy abroad are not doing so with the intention of actually living there but instead they are using this just to get on to the UK property ladder. They can potentially buy a decent size property abroad for half of the cost of the UK and this can then be rented out for a few years until they are ready to sell and then they can put that equity towards a home in the UK.

Many well known property portals such as Rightmove, Propertyfinder and Primelocation also have overseas sections.

Some UK estate agents such as Knight Frank and Savills also sell overseas properties.

When looking for property abroad it is also worth checking out the press as some overseas developers often market new build properties this way.

Once a potentially property is found the next thing to look in to is mortgages…….

Interest rates for overseas mortgages are generally lower than for UK mortgages and specialist brokers can in these particular mortgages can be found through the independent financial adviser website,

However, overseas mortgages are not regulated by the Financial Conduct Authority (FCA), which means that borrowers have no means of redress if a mortgage adviser mis-sells a mortgage product.

It does also seem that options for borrowing from a UK bank are limited, although there are institutions that do lend to buy abroad, these tend to be those who have offices in the countries concerned, therefore technically the borrower is still getting a mortgage in that country.

Santander offers mortgages for buying in Spain as does the British arm of the Halifax. Lloyds TSB lends for purchases in a range of countries including France, Spain, Portugal and also the United States of America. Not forgetting Barclays who also lends on properties in France, Spain, Italy, Portugal, Dubai and South Africa.

As these lenders are based in the UK they are all still regulated by the Financial Conduct Authority (FCA).

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