Where to buy an Overseas Property in 2019
Comment by Simon Conn, AIPP member and the UK’s leading overseas property and finance specialist
With Brexit decisions and implications clearly on the horizon, trying to predict which road the overseas property market is going to go down this year is not easy.
Pressure on the pound
Looking back at 2018, it was an interesting year with the traditionally popular countries such as France, Spain, Portugal, Italy and the USA being quite steady, with no dramatic uplift in any of the countries.
For British purchasers this has not been helped by the pressure on the pound – making the setting up costs and the actual purchase higher than previous years. Interestingly, there has been more interest from Scandinavian, USA, Middle and Far East buyers who have still seen some prospective bargains and this has extended to them considering purchasing in the UK for either investment or future retirement basis.
This has also meant that some of the countries mentioned above have started new build projects and I have received a number of business plans for golf and holiday villa projects, which bodes well for the future.
Plan and Purchase
With tourism on the increase in Cyprus and Greece, the amount of interest there has greatly increased, but borrowing in both countries continues to be difficult as they recover from their economic problems.
Turkey has increased in popularity in the touristic areas, but there is still concern on its eastern border if the war in Syria escalates again. Thailand has got busier, especially with interest from Far East and Australian/New Zealand-based clients. The Caribbean is steady, with interest more from Canadian and USA-based clients, and the Dominican Republic, Bahamas and Barbados are the most popular.
Other popular countries include Ireland, Germany, Canada, Malta and Holland.
Once a decision has been reached over Brexit, I expect the overseas property market to have a more dramatic spurt as clients can then plan and purchase with a degree of comfort, knowing what their funds (and any subsequent mortgage, if required) will allow them to buy. This is especially the case for British buyers if the exchange rate recovers in their favour.
Typical mortgages for some of this year’s property hot spots are given below. Interest rates will vary depending on a client’s overall personal financial profile, loan-to-value ratios, purchase price, location, type of property and amount borrowed.
Typical mortgage terms
Mortgages are available at around 80%-85% loan-to-value, although better lending terms are available for loans of 70% or less.
Mortgages are available up to 70% loan-to-value, with better lending terms available for loans of 60% or less. The Canary Islands and the Balearics are increasingly popular, with loan-to-value rates on a par with mainland Spain.
Mortgages are available up to 80% loan-to-value. Better lending terms are available for loans of 70% or less.
Mortgages are normally available at a maximum of 60% loan-to-value, although in some cases it can go up to 70%.
Mortgages are available at 70% loan-to-value, or up to 75% in Florida