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Les Calvert is the owner of and many other property and travel related websites. Les writes news and articles on the overseas property market for leading websites, trade magazines and newspapers.

HOUSE buyers in Scotland are becoming a jet-to-let generation – snapping up properties overseas, after being priced out of the domestic housing market.

The UK property boom has meant prices have soared above the means of many Scots. But, with a growing number of routes being offered by no-frills airlines from airports across Scotland, the option of buying a property overseas is increasingly popular.
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The claim – from the director of the Homes Overseas Exhibition, being staged at Glasgow’s Scottish Exhibition and Conference Centre today and tomorrow – comes as new research shows that the average UK homeowner had lived in their current property for 14 years and settled into their long-term family home at the age of 38.

Would-be home buyers – including first-time buyers and those looking for an investment opportunity – are looking at overseas markets for getting onto or climbing up the property ladder, according to Miki Reeder, director of this weekend’s exhibition.

Warmer climates, relaxed lifestyles and low-cost air travel have combined to make buying a property abroad an appealing alternative to buying in the UK, he said.

The average cost of a house in Scotland is now in the region of £105,500, according to the Bank of Scotland house price index. The most expensive area is Edinburgh, at £177,028, followed by Perth, at £144,993. The cheapest were Paisley at £95,792 and Dundee at £102,351.

It was not surprising then, said Reeder, that many first-time buyers were being seduced by more affordable homes overseas. Those looking for a holiday home or investment were also increasingly buying second homes in foreign climes, largely because of elevated prices in the UK.

“The UK housing market has become saturated with buy-to-let properties and investment in UK property is not necessarily yielding the same returns of yesteryear,” he said.

“This has led to the UK population looking further afield and, thanks to low-cost airlines servicing most European resorts and the lower cost of property throughout the EU, the jet-to-let generation is booming.”

Buying and letting out property overseas could be a sound investment, helping to raise capital for future property purchases or as a retirement home in years to come.

A two-bedroom property in Marbella’s Old Town on the Spanish Costa del Sol would cost in the region of £100,000 and could bring in £300 per week off-peak and £500 during the peak season. Meanwhile, in Carcassonne in France, the average cost of a property is just £72,000.

“Compare this to the average cost of a property in the local area and maybe buying abroad is the only option for many people buying for the first time or investing in their future,” said Reeder.

“With the added benefit of airlines such as Ryanair, EasyJet, Globespan and Excel Airways servicing more than 20 European destinations from Glasgow, Edinburgh, Prestwick and Aberdeen airports, it wouldn’t be too costly to get to the location of your choice.”

Despite the rising cost of getting on the housing ladder, research from online bank Egg has showed the bulk of British homeowners – 63 per cent – move because of aspiration, rather than necessity.

The average homeowner owns three homes during their lifetime – but moving just an average three miles from their previous address. One in four claimed they were influenced by TV property programmes and a desire to keep up with the Joneses. That compared with just 15 per cent in Scotland.

Scots also typically moved a little further than the average Briton. They moved 12 miles – nine more than the average and compared with a high of 21 miles in Wales and a one-mile average in London.

“Our research clearly shows we all want to live in nicer homes, in nicer areas which have good potential and will cater for our financial futures,” said Andy Deller, banking and insurance director at Egg.

“But what it also highlights is that British homeowners are motivated by a desire to climb the housing ladder, to improve their surrounding environment for themselves and their families before finally settling down into their long-term home.”

Source: Scotsman

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Mortgage services to buy property abroad are available from many offshore banks and building societies.

Rates vary depending on the country, but they are likely to be slightly lower by purchasing in Europe and taking out a mortgage through a well-known offshore bank, then they are on a property in the UK.

Some banks will offer mortgages only in euros, although others do also offer them in sterling for people buying in Europe. Anyone who opts for a euro mortgage but is paid in another currency should remember that there is the risk of volatility in the exchange rate.

Anyone who is paid in sterling should try to borrow in sterling. Euro mortgages are really only suitable for those earning euros. David Hollingworth, of mortgage brokers London & Country Mortgages, said: “There can be additional exchange rate risk if borrowers take the mortgage in a different currency from that in which they derive their income.

“For example, if the foreign currency strengthens against the pound then effectively the mortgage and the monthly payments increase even though there has been no change in the interest rate charged. If a foreign lender is used, the mortgage is likely to be in the foreign currency, whereas some of the offshore operations of UK lenders will be able to lend in sterling.”

It is not just currency risk that could cause problems. Legal systems can vary greatly, so it is important to understand the specifics involved. Alison Rolls, of Norwich & Peterborough Building Society, which offers mortgages on properties in southern Spain and Gibraltar, said: “Do be aware that there are significant differences between UK and Spanish land law. In particular, note that contracts to purchase property can become legally binding very quickly, so don’t sign anything before seeking legal advice.

“If you have set your heart on a property because of its wonderful, uninterrupted views, do find out if any development is planned or would be permitted that would ruin your vista.”

Norwich & Peterborough will lend up to 75 per cent of the property valuation in sterling, and the minimum purchase price must be £60,000. Its Spanish home loans include a standard variable rate, currently 6.75 per cent; a tracker mortgage which is the UK bank base rate of 4.75 per cent plus 0.24 per cent in years one and two, followed by the base rate plus 1.25pc per cent in years three to five, followed by the variable rate; a two-year fixed rate at 3.79 per cent; and a five year fixed rate at 5.49 per cent. Application fees start at £375, depending on the valuation and there is a £250 reservation fee.

According to the building society, a typical customer buying in southern Spain pays £196,462, compared to £168,614 a year ago. Borrowing averages 58 per cent of the value of the property and the typical mortgage is £113,184 over 16 years.

Anyone finding it difficult to arrange finance could remortgage their UK property to release equity.

Source: Telegraph

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Britons looking to invest overseas could do a lot worse than buying a place in Cyprus, a new report claims.

Since 2000 house prices in Cyprus have tripled, property group Assetz reports, with an 18 per cent rise in 2004. Over the last 12 months UK house prices rose just seven per cent, Nationwide said last week.

The island’s 340 days of sunshine a year make the country an attractive buy-to-let investment, and these are coupled with climbing house prices and European Union membership.

Additionally, Cyprus is set to join the euro in 2007, which Assetz believes will see property values rocket 50 per cent and mortgage rates fall from the current 7.5 per cent to the eurozone level of 3.5 per cent.

“Prices [on Cyprus] are still considerably lower than in France or Spain – a three-bedroom detached villa with a private pool would currently set you back around £250,000 in a quality location, which would probably only stretch to a large two-bedroom apartment in the South of France,” said Stuart Law, managing director of Assetz International.

And he said that growth in house prices was set to continue, due to interest from buyers across Europe and an undersupply of property.

Assetz points to Paphos as the top current location, with the Polis and Larnaca areas cheaper to invest in and seen as “up and coming”.

However, there are potential problems with investing in the Mediterranean island as well.

“There is a ‘sixty day rule’ for registering land purchases in Cyprus when buying off plan. It is essential for the buyer’s lawyer to register the purchase within sixty days in order to preserve the purchaser’s legal rights over the land on which the building will sit,” Mr Law pointed out.

“If this is not done, the land remains the property of the developer until after the development is completed or beyond,” he explained.

He added: “I would also warn investors to limit their property investments for the time being to Southern Cyprus.

“Since restrictions on movement and trade in the north were lifted when Cyprus joined the EU last year, many Greek Cypriots have returned to land they lost and are claiming restitution or negotiation with one particular high-profile court case in the papers just last week. For this reason I would not advocate buying in the North until these issues have been resolved.”

Source: MyFinances

According to available statistics, the United Arab Emirate’s real estate market is expected to jump to 230 billion dirhams ($63 billion) in the next seven years which is an unparalleled achievement given the size of the country.

The sustained uptrend in global oil prices has contributed to this phenomenal growth leading to availability of surplus funds especially with the Gulf Cooperation Council (GCC) governments. Development of property and real estate has given rise to a host of property developers, financial institutions and fund management companies spread throughout the UAE with the main concentration being in Dubai.

Emaar Properties of Dubai has started construction of Burj View East Tower, the third and final high rise building in a three-tower project. Burj View is the world’s tallest tower, providing panoramic view of Downtown Dubai.

The project is expected to be completed by early 2008. The project offers one and two bedroom Burj Views residences covering an area of 726 square feet to 1400 square feet and offering a unique combination of amenities and unprecedented value.

Since its inception a year ago, the Dubai-based home finance company, Tamweel financed property worth 1.7 billion dirhams ($463 million). Tamweel’s meteoric growth within less than one year is ascribed to the fact that it has addressed a core sector of property market by affording a range of innovative products and working on distinct service strategies.

Jumeirah Beach Residence is perhaps the world’s single largest residential-cum-commercial property development project stretching along 1.7 kms of Jumeirah Beach. Besides Jumeirah Beach Residence, Dubai Properties has one more equally prestigious project, Business Bay. Both Jumeirah Beach Residence and Business Bay have been extensively exhibited at Home Owner Exhibition in Dubai which attracts visitors from the Gulf, the Middle East, United Kingdom, the whole of Europe, Russia, India, Americas and Australasia.

It is not only the residential or commercial towers/complexes which attract investors from the real estate market, even leisure and entertainment segment is making waves to leave a mark on Dubai’s property scene.

Tulip Business Developers’ flagship project, “Westside Marina” is worth 84 million dirhams and it offers the highest standard of designer, quality and luxury living to Dubai residents. It offers 67 luxury apartments of one to two bedrooms each with a price tag of 1.2 million to 1.8 million dirhams with 13 different layouts inclusive of six garden apartments with their own private gardens. Tulip is also investing more than $82 million (300 million dirhams) in Dubai Properties’ Business Bay and Palm Deira projects.

Another equally ambitious project is “Lakepoint” freehold tower at Jumeirah Lake Towers at a cost of 300 million dirhams. LAI General Trading (a 50-50 joint venture partnership between Al Yousuf Group and Gulf General Investment Co.) will develop the 45-storeyed Lakepoint Tower which consists of 414 apartments of one, two and three bedrooms each to be offered on freehold basis. The Tower, a purely self-financed project, is set to be completed by 2007.

Another relationship has come about between Damac Properties of Dubai and M.B. International Holdings, a leading private property company that owns and manages commercial and residential properties in the U.K., the Mediterranean and Eastern Europe. In a landmark deal, Damac has sold out all retail space in its “Marina Terrace” project to M. B. International. Its senior executive praises the project as “Marina Terrace” sets new standards for opulence, exclusivity and luxury living. Its super-contemporary design and sensibility exudes grace and style…..”.

RAK Real Estate Company is slated to embark on a very ambitious project called “Mangrove” at a cost of 2.7 billion dirhams. Starting initially with large scale renovations in certain parts of Ras Al-Khaima, the company shall undertake the development of Mangrove project which covers 700,000 square meters. Created under the royal decree, the RAK Real Estate Company operates in vast and diversified spheres including construction, purchase and sale of real estate, property rental and renovation of existing buildings/properties.

Another financial institution hitting the headlines on the Gulf’s Real Estate scene is Bahrain-based Gulf Finance House (GFH). Euromoney magazine has, second time in a row, selected GFH as the best Islamic Real Estate Finance House for its cutting edge Shariah-compliant investment initiatives in the real estate sector. GFH’s Chief Executive Officer, Esam Janahi, confirmed, “Real Estate, as an asset class, yields higher returns when compared to other conventional options.

The finance house has made use of lucrative opportunities thrown up by the GCC as well as overseas property markets”. GFH has successfully positioned itself as a leading financial institution with a focus on raising investments in the Gulf and placing these as private investments in projects both internationally and in the Middle Eastern region. Across the globe, GFH has investments in blue-chip properties in Spain and France. Backed by a team of management professionals, GFH has, within a short span of time since its inception, increased its assets in excess of $1 billion.

Source: MENAFN

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Buying a second residence is becoming increasingly popular amongst Europeans, according to The Royal Institution of Chartered Surveyors’ (RICS) European Housing Review. More people are purchasing second homes, either in their own country, or abroad.

These homes may be rented out, but are generally used by one family and directly owned. Most second homes are acquired for leisure purposes. The investment aspect is important since significant proportions of household assets are tied up in them. In countries with a high proportion of rental property like France, Germany and the Netherlands, it is not unusual for people to rent their primary home but own their second. Owning another residence gives people living in dense, urban areas access to a more spacious environment, often by the sea where there is a more moderate climate.

Since the UK has a moderate climate, expensive housing and many urban dwellings with gardens, it has traditionally ranked relatively low on Europe’s second home league. The second homes market has long influenced planning and design in the primary housing markets of many European countries.

The fortunes of second homes and retirement markets are closely entwined as those looking to retire are attracted to the same places as those seeking a second residence for weekends and holidays. Holiday homes such as those in the Spanish coast, can be lucrative investment opportunities, providing a combination of capital growth with rental income.

The proportion of second homes across the EU varies considerably, with some of the highest concentration located in Southern European countries because of both the high local demand and their attraction as classic holiday destinations. In countries such as Greece, Italy, France and Spain, between 10 and 15% of housing stock is comprised of second homes.

Although Southern Europe is better known for its second homes, there is also a high proportion of second residences in Northern Europe because of the number of affluent countries in the region.

The past five years has seen a particular boom in second homes in many countries, although this is now coming to an end. The second homes market is at a greater risk of a crash than the primary homes market, since they are the first thing to be disposed of when people need to economise.

However, an imminent crash is unlikely.

According to Michael Ball, author of the European Housing Review: ‘Europe has had some of the liveliest second homes markets over the past five years, but if people are looking for a second home as an investment rather than a holiday home, it is probably too late to expect good returns as the market is currently at its peak.

‘The trend for second homes is likely to grow in the long-term because of cheap flights and lower living costs abroad.’

More information on the European housing market is available at RICS

Almost three-quarters (72.2%) of young Brits are considering moving abroad at some point, with over one in ten (12.3%) contemplating making the move within the next five years according to data released by the Fresh Start Show (13 to 15 May 2005 at London’s ExCeL Centre).

These findings support figures from the Office of National Statistics which show that emigration has reached its highest ever level, with 190,900 Brits leaving the UK to live abroad in 2003

Moving down under

According to the Fresh Start survey, the most popular destination for young professionals considering emigration is Australia, chosen by almost a third (32.1%) of respondents, followed by France (15.5%), America (11.9%) and New Zealand (10.7%).

Best of British

However, despite the willingness of young Britons to consider leaving their country, there are many things they would miss. Top of the list is family and friends, followed by pubs and the countryside. Men and women then differ in their priorities, with men rating British sport as important whilst women would miss the UK shops more.

The weather would be the least-missed aspect of the UK for both male and female emigrants.

Jet-set jobs

Money and work are the top motivators for leaving the UK, with over half (58.1%) of those who answered the survey admitting they would be encouraged to move abroad if offered a job transfer. Almost one in five (19.8%) would start packing if they came into a large sum of money with the lower cost of living overseas an attraction for almost one in ten (8.1%).

Cost is also enough to put people off moving, specifically the cost of moving and fears of higher living expenses overseas. However the biggest deterrent is not knowing a foreign language.

Nick Clark, managing director of Homebuyer Events said: “These statistics show the extent to which other countries are becoming more accessible with increasing numbers of people seriously considering moving abroad.”

“More and more people are realising that their dream of life on sunnier shores is not only achievable, but a viable option in terms of living costs, property prices and quality of life.”

The Fresh Start Show will provide expert information and advice for anyone considering living, working or investing abroad. Held at the ExCeL Centre in London’s Docklands from 13 to 15 May, over 100 exhibitors and a full seminar programme will include the New Zealand, Australian and Canadian immigration services as well as specialists in overseas property, money transfers, removals and others, covering emigration to Europe and the rest of the world.

Source: in2perspective

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Expatriate South Africans are behind a rise in the number of online applications for mortgages, according to home loan facilitator MortgageSA.

MD Saul Geffen says there has been a marked increase in South Africans living abroad applying for home financing through the company’s Web site and call centres.

“Internationally, people have become very comfortable with buying things online through greater Web site security and the greater convenience of keystrokes over traffic jams and crowded shops.”

“And with the many excellent property Web sites showcasing South African property, increasing numbers of expats are comfortable buying property this way, then come to us for financing.”

He adds that the company receives dozens of enquiries a day – mainly from South Africans in London who plan to return to SA. Most buy in Cape Town and Johannesburg, but increasing numbers are buying in Durban.

Geffen says expatriates can typically secure up to 80% or 100% financing on a property, even though they work overseas.

“The client will provide us with their gross income earned overseas and we will do the calculation. Banks would typically lend an amount based on what the expat could earn in SA, which is often lower than what they would earn abroad.”

He says banks want to be assured that if expatriates return, they will be able to service the bond payments from their local income.

“We work with all the major banks and are normally able to find a great deal for the expat,”

Geffen says.

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