A beginner's guide to buying a home overseas

Posted 2 October 2015 by Stephen Maunder

It’s a good time to purchase an overseas property, with European markets improving, increased mortgage availability and favourable exchange rates encouraging Brits to purchase real estate on the continent. Indeed, the prices being paid by British buyers in Europe have dropped by around 10% since the start of the year, as the pound goes from strength to strength.

Each year, around 300,000 Brits take the plunge and buy a home overseas, but it’s not always plain sailing. The buying process varies from country to country, and some markets are more difficult to gauge than others. Here’s our guide to finding and purchasing your ideal overseas home.

Choosing a location

The first thing you will need to clarify is the primary reason for your purchase. Are you moving abroad permanently, using the property as a holiday home, or purchasing as an investment to boost your pension pot?

Whatever your reason, you must thoroughly research everything from the climate to the attractions and the transport links of each area you are considering. If you’re planning on becoming a landlord, you also need to look in to the local schools and amenities in greater detail.

Buying in a desirable area with positive market growth is important whether you’re an investor or a settler, so get to grips with the local property market, and above all, always visit the area before you commit to anything.

Transport

Do you need easy access to the UK for family or work commitments? If so, find out how close the property is to the airport and train connections. Adding an extra day of travelling to each end of your journey might not seem too important right now, but could prove to be a major headache once you’ve moved.

Keeping a close eye on transport is also vital for those purchasing for buy-to-let purposes, with transport links ranked among the most important factors for renters.

Budget

We’ll come on to the additional costs of purchasing a property later, but carefully outlining your purchasing budget should be at the top of your list before you start weighing up different locations. Having a degree of certainty about what you can realistically afford could save you heartache and the danger of being drawn in to stretching your finances to their limits.

Climate

A place in the sun sounds perfect on a cold day in England, but what does it really constitute? Consider how well you will adapt to the climate in your chosen area – perhaps it won’t be hot and sunny all of the time, or it could be sweltering. At the other end of the scale, you need to be aware of any extreme weather in rainy seasons, with countries such as America prone to hurricanes and tornadoes.

Location

One of the biggest allures of purchasing overseas is the promise of a change of scenery, so make a list of the things you are searching for in your new location. Do you want to be at the heart of the action in a large city centre, or are you in search of a rural escape in a small village away from everything. The good news is that popular countries such as France and Spain offer a range of lifestyles suitable for all types of buyer. 

Lifestyle

Do you want to live among the locals and sample a truly unique atmosphere and way of living, or would you prefer living in a neighbourhood surrounded by other expats?  When considering how you might fit in to an area, take a look at which amenities are most important to you, from the necessary – medical facilities and schooling if you have children – to the recreational. 

Buying tips

Be wary of sales tactics

Never rush in to buying the first property that you visit. Ensure you view a range of homes, and if you are taking a trip with an agent, be wary of the hard sell. The best thing to do is take your time and wait until you have returned home before making any decisions. If you then want to purchase, visit again alone for a ‘warts and all’ viewing.

Appoint an independent lawyer

Even if the purchase seems relatively straightforward, you should always use an independent lawyer who will represent your interests throughout the transaction. Taking independent advice will offer a degree of protection when dealing with local agents, and although it could cost a sizable fee, this isn’t an area of your purchase to cut costs on.

Be careful when buying off-plan

Off-plan sales are very popular at home, particularly in busy city markets where great deals can be available for early birds who are willing to wait, or investors looking to ‘flip’ a home. Off-plan purchases abroad involve are more risky, however.

If you choose this route, take legal advice and do not make any payments without a bank guarantee, and ensure all sales contracts involve a money-back guarantee if the development is not started, delayed, not completed or built to a poor standard. Always do background checks on the institutions involved and keep copies of all documentation. If in doubt, seek legal advice.

Consider additional costs

In the UK, the additional costs of purchasing a home average around £12,000, and you should budget similarly when purchasing abroad. Surveyors, mortgages and taxes will need to be considered, as will financial advisor costs, international bank transfer fees, translation fees and legal fees.

Speak to estate agents and consider visiting international property trade shows to learn about the different processes in other countries. Some countries will offer tax breaks for purchasers to encourage growth, and lawyers’ fees vary significantly from country to country.

Most popular places for Brits to buy homes abroad

Existing owners:

  1. France
  2. Spain
  3. USA
  4. Cyprus
  5. Portugal

Future buyers:

  1. Spain
  2. France
  3. Italy
  4. USA
  5. Portugal
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