HiFX has teamed up with Intasure, experienced providers of insurance for holiday homes abroad, to create this four part guide to holiday home ownership. In this first part, we suggest some potential aspects to consider when choosing the best location for your holiday home. It’s easy to understand the appeal of a holiday […]
Since the UK voted to leave the EU in June last year, the fall in the Pound has dominated the headlines. It has so far dropped around 18% against the US Dollar and 12% against the Euro compared to before the Referendum. There’s also speculation that it could fall further once Article 50 is triggered, […]
Following the result of the EU Referendum, it is unclear what will happen next to the Pound. The initial shock of the Brexit vote caused it to lose value significantly at first, but then its value seemed to start stabilising. It regained some of its losses following more positive than expected economic figures, but questions […]
Spain is one of the most popular destinations for British people to buy holiday homes, and it’s not difficult to see why. Spain offers glorious weather and beaches for a relaxing retreat, whilst only being a short flight away from the UK for an easy getaway. If you are thinking of buying a holiday home […]
You’ve found your perfect holiday home, in the ideal location, so why are you struggling to let it out? To help you market your overseas property effectively we’ve compiled a list of top marketing tips, to show everyone just how desirable your home abroad really is.
Every year thousands of people get their foot on the foreign property ladder and buy their dream holiday homes. To offset the costs of their overseas home many look to rent it out for part of the year, so to help these prospective landlords we’ve compiled a list of seven key tips on buying, selling, […]
Sunny Spain and France remains Brits’ favourite location for buying property abroad Land of opportunity: USA and idyllic Switzerland swoop in as joint third favourites for Brits buying abroad. Now is as good a time as ever to invest abroad, with the strengthening pound offering attractive rates for house-hunters. France and Spain remain the firm […]
This is the latest in our series of guides and helpful resources for those planning to move abroad or buy property overseas. Remember, its vital to think carefully about your circumstances and always remember what the primary use of the property is.
The good news is you’ve found a property to buy overseas. But you can’t put your feet up just yet. Buyers need to understand the legal process involved, and think about the best way to finance this purchase. If you aren’t fully involved with both, you could end up paying over the odds – or […]
Before you start your search for an overseas property, think carefully about what you are looking for.
This may sound like obvious advice, but it is surprising how few people construct a basic checklist. As a result, many waste time looking at unsuitable properties, or get swayed by the ‘great view’ or ‘bargain price’ without thinking whether it is practical for their needs.
Knowing exactly what you want helps you narrow your search – which means you’re more likely to find your ideal property. The more comprehensive the checklist the better, but don’t overlook these three key factors:
- Location: Are you looking for somewhere near the coast, a rural retreat, or a property in an urban location. If you are looking for somewhere ‘away from it all’ just how far do you want to be from shops, bars and restaurants.
- The Property: How many bedrooms do you want? Are you looking for a new-build or ‘character’ property and what additional features would you like – for example, a garden or pool?
- Access: Focus on the logistics and costs of getting there. How far do you want to drive from an airport? Is it important that this is served by the low-cost carriers, or more than one airline?
Obviously you will have a budget in mind. If you can’t find properties that meet your criteria, within this budget, you may need to reassess your priorities – or possibly look at other regions or countries.
BUSINESS OR PLEASURE?
Your priorities will be shaped by the reasons for buying the property. Some will be looking for a holiday home, or somewhere to retire to; others for an investment property.
Glossy TV programmes may suggest it’s easy to combine these: so you get your perfect spot in the sun, that ‘pays for itself’ with rental income when you can’t use it. But things are rarely that simple.
If you are buying a property primarily as an investment you need to focus on the financial aspects of the deal. As well a looking at the likely rental return, you’ll need to factor in maintenance costs, housekeeping utility bills and local taxes. Even if you are not resident, you’re likely to pay tax on the rental income received – although you may be able to offset this against your UK tax bill.
If you are hoping to rent the property to other UK holidaymakers, then a key factor will be how accessible it is. You should also consider the length of the holiday season, it’s potential for off-peak lets, and – most importantly – what price your guests will pay.
One way to gauge this is to look at other holiday homes in the area. What price are they charging and how many are available close to the peak holiday periods?
Make sure you do this research yourself; developers and agents selling holiday villas and apartments may exaggerate rental yields to push through a sale.
If you’re buying for yourself, then your own preferences can take more of a front seat. But if you’re only planning to use it for a couple of weeks a year – and rent it the rest of the time – you need to focus on how your own preferences impact its rental potential. Perhaps the best rental yields are in more popular destinations, or on cheaper newer builds, that wouldn’t top your holiday ‘wish list’?
Those looking for somewhere they may use as a retirement pad also need to consider the country’s health and social services (see ‘Retiring Overseas’ for more information).
RESEARCH, RESEARCH, RESEARCH…
We’ve all casually browsed an estate agent’s window when enjoying a holiday. A holiday is a good time to start thinking about buying in a particular region or country – but it isn’t the time to finalise decisions.
First you need to conduct some more thorough research. Start at home, on the internet to get a feel for for the range of properties that are available, and at what price. Compare these to prices in other regions, and other countries.
Next think about organising a dedicated property-hunting visit. This gives you a chance to explore the place more fully, and visit outside peak holidays periods.
Make sure you look at properties from more than one agent, to get the broadest market view. If they know they have a captive buyer they may try to take advantage. One classic manoeuvre is to show a potential buyers a string of mediocre or overpriced properties, follow by a more suitable one, knowing it will be flattered by the comparison.
By the same token be wary of developers’ inspection trips. They are often subsidised, so seem a cheap way to fund a house-hunting sortie. But developers will only show you a very narrow selection of options and buyers can be subject to the hard-sell. Don’t sign anything there and then -wait until you have returned home, to give you time to assess your options properly. (For more tips on buying a new-build property from a developer, see below)
Finally don’t be seduced by visiting a property at a certain time of day, or year. If you are planning to use a property out of season, or retire there, make sure you spend time there in these off-peak periods. Don’t just Google ‘average temperatures’, visit and see what local services are like once the tourists have left.
A comprehensive search can give you a better understanding of local property prices, where the hotspots are, and whether prices are rising or falling. For those buying to invest, it’s important to pay attention to these trends – the ideal being to buy near the bottom and sell near the top of a cycle.
You can find estate agents selling property overseas through trade bodies such as the Association of International Property Professionals (AIPP). The AIPP also has a useful buyers’ guide on its website.
BUYING A NEW BUILD PROPERTY
Buying a brand new property from a developer can seem like an easy option: most will translate the relevant documents, hold your hand through the buying process, let you pay the deposit in sterling and even arrange mortgage finance. All you need to do is sign on the dotted line.
But there are pitfalls to watch out for. The main danger is that the developer will go bust before the project is finished, leaving those who have paid their deposit out of pocket. Another more common problem is that the finished building bears little resemblance to the glossy brochure, or ‘show rooms’ that you visited.
To try to avoid these problems, bear the following in mind:
- Always read the small print in the brochures. Insist on having detailed specifications for the building and fittings.
- Don’t make any payments without a bank guarantee. Ask if there is stage payment insurance – which should refund your money if the building is not completed.
- Don’t sign anything unless there is a ‘cooling off’ period.
- Appoint your own independent lawyer. Get them to read all the documentations and check the validity of any ‘bank guarantee’.
- Make sure the developer is has agreed to refund any advanced payment, with interest, if the building is not completed on time. This should be in the sales contract. Don’t sign if it’s not.
- Ask to see evidence that the correct planning permission has been granted (known as a ‘habitation licence’ in Spain).
- Keep copies of receipts of payment, and all documentation relevant to the property’s purchase
- Ask to see finished developments and references from previous buyers