AS holidaymakers relax on a foreign terrace this summer conversation will inevitably touch on how nice it would be to own a place in the sun.
The number of Britons owning overseas homes has soared over the past decade, but the pitfalls involved in turning aspirations into real-life bricks and mortar remain.
But whether you are buying in Morocco or Madrid there are some simple rules to follow that can make the process go as smoothly as possible. Simon Lambert outlines the five steps to buying a holiday home in the sun.
1. Research, research, research
If you are seriously considering buying a property abroad you need to do research – and a lot of it. The internet means there is no excuse for not taking advantage of the wealth of information at your fingertips.
Investigate the countries and areas you are considering and see what is on offer. Any website owned by a property-related business is interested in getting you to buy. Look at community websites run by expats or those who have holiday homes in the area as well.
There are countless internet forums run by people who have taken the overseas property plunge. Reading about other peoples’ experiences will give you an idea of the potential problems of buying in your chosen country, and any extra expenses you’re likely to incur.
There are also hundreds of companies that, for a fee, will help you buy a home on the Continent. If this is a route you’re considering, investigate them carefully before choosing to give them your hard-earned cash as they’re not all particularly reputable.
It’s also worth noting that This is Money has a brochure service for overseas property. We will send you brochures for free. It’s not a recommendation but helps you to research before you set off house-hunting.
2. Get your finances sorted
Funding the purchase of a home abroad can be done in a number of different ways. One of the most popular means is remortgaging a British home to release cash to buy a second home. The advantage is that borrowing is all from one place and repayments will be made in the currency you are paid in.
Some lenders offer special overseas purchase mortgages and Abbey uses its link with parent company Banco Santander to offer a Spanish mortgage, paid in euros. If you are looking for assistance, it is possible to borrow in a variety of countries through a specialist overseas mortgage broker. Brighton-based broker Conti Financial Services can find mortgages for countries ranging from Poland to Australia and offer further expert advice to purchasers. Bear in mind currency fluctuations will affect your repayments
3. Visit where you want to buy
Getting to know the area is essential and a number of visits before buying is ideal. Investigate the area without an agent in tow and then make plenty of bookings to view properties. Don’t fall for the hard sell and if you see a property you like make sure you have a cooling off period to discuss its pros and cons.
Don’t get carried away with the romance of a particular Spanish villa. Approach this purchase with the same caution as you would with a house back in Britain and ensure you get the appropriate checks and surveys done before handing over your money.
4. Get the experts in
Different countries have different property laws and regulations, so it’s important that you find a good, fluent English-speaking solicitor who is not connected to your seller, estate agent or property developer. They should be used to dealing with overseas purchasers and go through all the possible fees, taxes, insurance issues, local authority rules and any possible pitfalls. The laws and procedures involved with every aspect of the housebuying process are often different to British laws, so make sure your solicitor’s local knowledge is excellent.
The local tourism office will be able to give you a list of solicitors and it’s important to visit a few before choosing.
If you have bought a plot of land and are having a property built make sure all planning permissions are covered and find a good architect. Again, the tourist office can help. If you think the service you are receiving is unsatisfactory, say so and explain if things don’t improve you will go elsewhere.
5. Make an offer
Once you have found your ideal home, set a maximum price you will pay and don’t go over it. After your offer is accepted and you have instructed solicitors make sure you keep tabs on them and the estate agents. Ask for regular updates and make sure you fulfil all the requests made of you promptly.
Make sure your funding is in place and consider using a currency specialist, such as HIFX or Moneycorp, which can offer better rates and the opportunity to agree a purchase cash advance at a set rate.