Whether for holidays or investment: Home in on abroad
Whether for holidays or investment: Home in on abroad – The Independent
Eurozone toxicity and civil unrest made for a dramatic year in 2012, but it also gave rise to opportunities for foreign buyers. With the UK’s property market still in the doldrums and a strong currency, more UK buyers are looking to invest in bricks and mortar abroad. The question is, where should you start looking and what do you need to watch out for?
Spain Spain is still top of the list for many Brits looking for a holiday home in the sunshine and prices came tumbling down – repossessed property prices fell by 65 per cent in 2012 – amid the economic turmoil. There are still bargains to be had, although tax breaks introduced by the Spanish government are due to end in January when the VAT rate for new property will rise from 4 per cent to 10 per cent.
If you’re buying a repossessed property, you need to be prepared for a more complicated, lengthy process and if the property needs work you’ll need an expert to assess it for potentially costly structural problems. Above all, be careful where you buy – repossessions are often in areas where properties struggle to maintain their value.
“While property price declines continued in 2012, signs were that quality properties, in decent locations and not flooded with other ‘me-too’ properties nearby, were becoming more price-resilient. This will continue in 2013,” says Louise Reynolds, a director of Property Venture.
If you want somewhere that will hold its value, Ms Reynolds suggests areas near to new infrastructure improvements such as the new high-speed AVE rail network and the €1bn Paramount Theme Park in Murcia due to open in 2015, which will boost the local economy and housing market.
France If you don’t want to gamble on Spain, the record low interest rates make France an appealing prospect. Recent property tax hikes under the newly elected government are a blow, but will not be enough to deter most buyers looking across the Channel.
“Out of our entire international network, France was our big seller last year ,” says Tim Brown, the head of international sales at Chesterton Humberts, which has a mixture of properties along the French Riviera, chalets in French Alps and homes in Paris and Normandy.
The weather, lifestyle and proximity to the UK make France a continued favourite, but with sterling going so much further, 2013 could be a great time to buy. And, if you can find a bank to borrow from, you get the best of both worlds by paying in sterling and borrowing in euros.
“While the euro is currently appreciating due to year-end repatriation flows and central bank reserve purchases, we expect euro weakness to re-emerge in the new year,” says Philip Hanson, from currency specialists Travelex.
Italy Italy is an easy sell with its climate, history and beaches, not to mention the food and wine. Its sluggish economy has also meant that sellers are finally willing to soften prices. Italy hasn’t been tarnished by overdevelopment in the same way as Spain and demand remains strong from Americans, Russians and Brits.