A COUNTRY pile has proved a sure-fire way to make money this year.

Some of the most expensive homes in the land have generated almost £80,000 in price increases for their owners since December, a report from the estate agent Knight Frank has disclosed. Manor house owners have seen the value of their property rise at a rate of £26,238 each month from January to March. Farmhouse and country cottage owners have had increases of £14,000 and £5,000 per month respectively.

Price inflation in the prime country house market hit a 22-month high in the first three months this year and on average country houses rose in value by 3.3 per cent during this period.

Record City bonuses, a strengthening of the economy and an increase in interest from overseas were behind the huge rise in buyer numbers and country house sales. The number of overseas buyers rose by 46 per cent in the past two years. In Surrey and Berkshire there was noticeable growth in the number of buyers from Russia, Europe and the Middle East.

However, a shortage of top-notch country homes for sale has led to stiff competition among house hunters. Liam Bailey, of Knight Frank’s research wing, said: “The country house market was pretty weak last year; now best and final offers are being taken for the first time in nine to twelve months. You get buyers waiting for a property in a certain area, and if it ticks all the boxes it doesn’t matter what they pay for it as long as they get it.”

The surge in prices was led by the top of the country house market, with the strongest price rises being recorded in the most expensive price brackets. Country houses costing between £3 million and £4 million rose in price by 6 per cent in the past three months alone.

Recent big sales include Edgecote Estate, Northamptonshire, which sold for £27 million, Sarsden in Oxfordshire, which fetched £24 million, and Woodperry near Oxford, which went for £21.5 million.

Robust price rises were also reported in lower price ranges. Country cottages costing on average £500,000 have experienced price rises of 3.1 per cent so far this year. Farmhouses costing about £1.15 million rose by 3.8 per cent, and manor houses costing about £2.66 million rose by 3 per cent.

The country market’s upturn followed a surge in London’s prime property market. In London, homes in the £1 million to £2 million price bracket rose by almost 14 per cent in the first three months of the year.

Rupert Bradstock, of Property Vision, the buying agents, said: “In Kensington and Chelsea I can show you properties that have risen by 15 per cent in value from September to February — that is a warning sign for the country house market. What happens in London usually follows in the country. We have seen gazumping and houses going under offer in a day.”

Knight Frank forecasts that prime country property prices will grow by 4 per cent by the end of the year, with the very best properties rising in value by 7 per cent. Its overall forecast for property price rises nationwide is 2.5 per cent.

Source: Times Online

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

In the wake of a global record holiday season online buying spree, South African property is the latest beneficiary of the rush towards cyber shopping. Saul Geffen, managing director of MortgageSA, the country’s leading home loan facilitator says: “We have seen a marked increase in South Africans living abroad applying for home financing through the MortgageSA website and through our call centres.

“Internationally, people have become very comfortable with buying things online through greater website security and the greater convenience of keystrokes over traffic jams and crowded shops. And with the many excellent property websites showcasing SA property, increasing numbers of expats are comfortable buying property this way — then come to us for financing.”

Geffen says the MortgageSA website is hosted on over 320 websites including being hosted on most major property websites.

Killing two birds with one stone

“Websites allow a property buyer to kill two birds with one stone; search for property and use online tools to calculate costs and affordability. Our marketing research shows that up to 25 percent of our web applicants are seeking our home loan application website via property websites.”

Geffen notes that MortgageSA receives dozens of enquiries daily — typically from South Africans in London who plan to come back to South Africa and settle down. Most buy in Cape Town and Johannesburg and increasingly, Durban.

Minimise the home loan process

“Expats are increasingly researching property and finance options via websites from overseas. They research their financial options very carefully and we provide them with all the information they need through our website and home loan calculator wizards. They come to companies like MortgageSA because they want to get a quick answer and minimise the hassle of the home loan process when applying through banks from afar.”

Expats can typically secure up to 80 to 100 percent financing on a property even though they work overseas.

Expats finding great deals on Overseas Property

“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 South Africa, which is often lower than what they would earn abroad.

A good example of this is the nursing profession. Nurses earn much more in Dubai than in SA so banks want to feel assured that if expats return, they will be able to service the bond repayments from their local income. We work with all the major banks and are normally able to find a great deal for the expat.”

150 000 home loans secured

Geffen says MortgageSA’s is successfully attracting expats because their website is easily accessible through major search engines like Google and is the only multilender mortgage application website in SA supported by a national call centre.

“We have now secured over 150 000 home loans for homebuyers and now a lot of our business comes from referrals from satisfied customers.”

“As we have a very well resourced call centre with specialised property finance consultants offering personalised service via telephone and on e- mail, we are able to build strong relationships internationally.”

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