PARADISE FOUND
WE’VE FOUND IT: NOW WHAT?
SO YOU’VE FALLEN IN LOVE WITH A PROPERTY IN PARADISE. CHECK IT OUT THOROUGHLY BEFORE YOU SPLASH THE CASH, SAYS ALEXANDER GARRETT
You didn’t plan it before your holiday, but you’ve just stumbled upon this magical little villa, with bougainvillea streaming over its whitewashed walls, and it happens to be for sale. Suddenly, your imagination is fired up: just imagine sitting here with a bottle of wine on the terrace of your very own hideaway in the sun. And picture the faces of friends and family back home when you show them the photos.
Time for a quick reality-check. Owning a second home overseas – or upping sticks altogether and moving abroad – can be a life-transforming experience. But if you buy in a hurry and make a mistake, it can also turn into a nightmare – leaving you with ample time to repent at leisure.
Gorgeous tiles, fountains,
patios and courtyards make
Moroccan villas hard to resistSo before making any rash decisions, a good starting point is to ask whether you should really be buying overseas at all. If you have demanding jobs, small children with years of school ahead of them and ageing parents in the UK to keep an eye on, how often would you really be able to get away and spend time in your home overseas? If the answer is once a year, it’s questionable whether owning a property is the best solution. After all, the £200,000 or so that people spend on average to buy a second home would fund plenty of stays in boutique hotels. However, for those approaching retirement, without children, or working for themselves, it may make a lot more sense.
So what’s the next step? First, think hard about the location. Places that are hot and sunny in summer can be cold and miserable at other times. If you want warm weather in the middle of winter, you really have to look beyond the Mediterranean to somewhere like the Canaries, Madeira, Marrakech or Dubai. It’s always a good idea before committing yourself to visit outside the main holiday season, and get a different perspective.
Next, don’t simply plump for the first property you find; look around to see what else is available, and what you can get for your money. Holidays aren’t necessarily the best time to look at property, as you’re not focused. Come back when you can concentrate on looking properly, and get agents to line up as many properties as possible to view.
Alternatively, consider using a property search service; they will have expert knowledge of the area, and can do most of the legwork for you. Rita Fryer, who covers Barcelona and Madrid for The Property Finders, says: “After listening to what our clients say, we have often helped them to buy property many miles from where they originally thought they wanted to be, or even an entirely different style of property.”
If you’re planning to buy an older, secondhand house, it’s particularly important that you get it checked out structurally. Sadly, people who would never dream of buying a property in the UK without a survey sometimes don’t bother if buying overseas – maybe the sun has gone to their heads. There may not always be the exact equivalent of a chartered surveyor on hand – in Italy, for example, the job is done by someone who is half-architect, half-surveyor – but you should at least be able to find a trusted builder who can check there are no serious problems, and specify what works will need to be carried out.
Warm winter weather
makes Madeira a
popular choice for
Brits buying abroadAnother piece of due diligence, just as important, is to ensure that the property is sound in legal and planning terms. The first issue is whether the property has “clean title”; what that means in practice is that the person selling it to you owns it outright, and without any dispute. In some countries, particularly in the former communist states such as Bulgaria and Croatia, land ownership has not always been clearly registered in the past. The second issue is whether the property has the required planning consent. In Vera, in southern Spain, a British couple had their home demolished earlier this year after the regional government ruled that it had been built illegally – even though they had permission from the local town hall. Other British owners’ homes are under threat – illustrating how vital it is to carry out legal checks.
For those contemplating buying an off-plan property, the best advice is: don’t automatically believe everything the developers or their marketing agency promise. It’s easy to be overwhelmed by glossy brochures and computer generated images, but read the small print carefully and check out the developer’s track record before you sign on the dotted line.
Last but not least, you’ll need to think about the costs and then decide how you’re going to finance your property abroad. Charles Weston-Baker, head of international sales at estate agent Savills, says: “I’ve discovered that, as a rule of thumb, people like to spend on their second home around half what their first home is worth.”
Start off with a budget of what you can realistically afford to pay in total, then bear in mind that in the countries of southern Europe, the transaction costs are higher than in the UK and will eat up 10 to 15 per cent of the purchase price. If you are renovating an old ruin expect the restoration costs to be at least as much as the property itself.
The most popular way to fund your overseas purchase is to take out a larger mortgage on your property in the UK and withdraw some of the equity in the process. The alternative is to take out a mortgage in the local currency, which in many cases will be Euros. Interest rates may be slightly lower, but you do run the risk of exchange rates moving against you, as they have done over the past 12 months, since a weaker pound will make your repayments more expensive.
Finally, don’t be put off. Buying a property abroad can be a hugely exciting adventure – just make sure that you don’t let your head get carried away by your heart in the process.
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