Investor appetite for overseas property still strong
With the cold months approaching and the Met Office predicting a wetter-than-normal winter, there will be many people turning their thoughts to that dream bolthole in the sun. And it appears that there are many already doing so, according to Conti the overseas mortgage specialist, where enquiries have shot up by 37 per cent so far this year, compared with 2013.
Spain continues to top the list of hot spots, accounting for more than half (51 per cent) of enquiries received over January to September. The volume of enquiries for Spain has, in fact, increased by a massive 95 per cent when compared with 2013. France, in second place, accounts for 29 per cent of enquiries received so far this year, followed by Portugal with 12 per cent.
Interestingly, however, France appears to be making a comeback, overtaking Spain in the third quarter with 35 per cent of enquiries, and 45 per cent in September alone, compared with 32 per cent and 18 per cent for Spain respectively.
According to Conti, there couldn’t be a better time to buy, with the strong pound shedding tens of thousands of pounds off property prices in the euro zone. Sterling exchange rates had a bit of a bumpy ride in the lead up to the Scottish referendum result in September, but the dust appears to have settled and the pound to euro exchange rate is hovering near €1.27 at the moment.
Rewind to last summer when the pound fell to a low of €1.14, and the difference is pretty significant when you apply it to property prices. It means that a €200,000 property in Spain, for example, is now almost £18,000 cheaper, showing just how much difference the currency markets can make.
Clare Nessling, director at Conti, says: “When you combine the strong pound with the low property prices to be found in many European property markets together with historically low mortgage rates, affordability is better than it has been in years. With buyers’ budgets stretching that much further, the purchase of that place in the sun could seem even more tempting, especially when you compare the cost with overheated parts of the UK market.”
As always, Conti says that it’s vitally important for buyers to seek the right advice. Bitter experience has taught many overseas property buyers that scrimping on independent legal advice can effectively cost them their holiday home. Buyers should always go through the same process that they would follow if they were buying a property in the UK. There’s nothing to be gained, and everything to lose by cutting corners and failing to carry out due diligence.