An upmarket British estate agency says it is using its ‘establishment’ reputation to reassure buyers worried about the pitfalls of finding a cheap home abroad.
Knight Frank, one of Britain’s oldest and grandest estate agents, is best known for selling multimillion-pound country estates in the UK. But now it has opened an international new homes division aimed at buyers with budgets as low as €130,000.
The new deal for buyers is not modest prices; the innovation is that even for such cut-price properties, Knight Frank will make rigorous checks on who is building what, and where.
Knight Frank’s ‘due diligence’ checklist should in theory mean an end to the uncertainties that plague low-cost overseas purchases – no proof of land ownership, no written planning permission, non-conformity with building regulations, inadequate checks and guarantees on build quality, and worries over the financial propriety of developers.
Other upmarket British agents have occasionally marketed cheap foreign homes in territories beset with such problems (Savills in Croatia and Hamptons in Oman, for example) but Knight Frank’s initiative is the first large-scale effort by a top-notch name.
There has been a spate of stories lately of alleged land grabs in Valencia, where a poorly drafted law has been exploited by Spanish developers who reclassify land reclaimed from owners without their permission. There have also been stories of locals in eastern Europe disputing the ownership of homes apparently sold to foreign buyers. Iberian property sales have been subject to enduring allegations about money-laundering.
Wealthy purchasers could always escape such pitfalls by hiring buying agents to find the best legitimate deals, or by using UK estate agents with overseas offices selling homes at the top end of the market. Knight Frank says it is now providing such services to those with more modest budgets.
‘Put bluntly, we have our reputation to keep up. We’re approaching these sales with the same rigour as with multi-million properties in England,’ says Knight Frank’s James Price.
The firm’s portfolio will include properties in the rural Umbria region of Italy, the Whistler ski resort in Canada, golf and ski resorts in France and so-far unspecified developments in southern Spain, where particular attention will be paid to issues such as build quality.
One low-cost territory that Knight Frank will avoid, for now at least, is Dubai. There have been queries about the titles of some properties sold here, and about whether demand can be sustained for the thousands of new flats built each year. ‘A lot of units are being traded like shares before they’re even completed. We need to wait for the market to mature to see whether it’s something we want to offer,’ says Price.
Another unlikely entrant to the budget overseas property market is Thomson Holidays. Hit by a slump in package holidays, Thomson announced a link-up last month with Parador Properties that will allow it to offer homes for sale in Spain, Portugal and Cyprus from its 750 high-street shops. Villas start at around £65,000, with an average selling price of £120,000.
Both Knight Frank and Thomson hope to tap into the strong demand from Brits for buying overseas – more than 500,000 have already done so – including first-time ‘jet-to-let’ buyers.