Spain soars ahead with 46 per cent of overseas mortgage enquiries in 2015
Spain remains the top choice for Britons buying property abroad, according to Conti, the overseas mortgage specialist. The country accounted for just under half (46 per cent) of enquiries received by the company during 2015, despite France stealing a march on its lead during the second half of the year.
Spain’s property market crumbled at the height of the financial crisis, sending property prices spiralling. But after years of the market being depressed, it’s starting to pick up, with Knight Frank reporting a rise of 1.2 per cent in Spanish property prices from the third quarter of 2014 to the third quarter of 2015. And this is leading to renewed optimism among potential buyers.
The gap is narrowing, however, with France showing a strong performance in the fourth quarter of the year, when it accounted for 44 per cent of enquiries compared with Spain’s 42 per cent. Over the course of 2015, however, it took a 34 per cent share, so is still playing second fiddle to its biggest rival over the longer term. A sluggish market, the growing value of the pound against the euro and the lowest mortgage rates in more than 60 years are making it affordable than ever to snap up a property across the Channel. And buyers are taking full advantage.
Maintaining third place in the hot spots list is Portugal, achieving a 15 per cent share of enquiries during 2015, up from 11 per cent in 2014. Property prices are on the up again at last, but are still generally below pre-recession levels, so investors, feeling more confident about the future and buoyed by the growing strength of sterling, are coming back to the market.
Clare Nessling, director at Conti, says: “It’s great to see the old favourites topping the list of overseas property hotspots. It wasn’t so long ago that the Spanish market was shrouded in doom and gloom, but the market has turned the corner at last and excellent buying conditions are luring investors back. We’re also seeing buyer’s markets in France and Portugal, and there’s been a general lift in confidence among buyers who are returning to these traditional markets in their droves.
“Bargain prices and historically low mortgage rates are making it more affordable than ever to snap up a property in all three countries, but the biggest boost to buyers’ budgets has been the growing strength of the pound, providing them with more buying power and more pounds in the pot. Long may it continue.”
Conti’s top five tips for buying property abroad
Obtain an Approval in Principle
This will confirm that you can obtain the necessary funds before signing any dotted line and prove to sellers that you’re a serious buyer.
Consider exchange rate fluctuations
We generally recommend that an overseas mortgage and the income used to service the mortgage repayments are in the same currency, thus avoiding exchange rate issues.
Check the developer’s track record and how long they’ve been trading. Obtain references from previous buyers and check comparable properties in the area and any re-sales offered on the same development.
Factor in additional costs
Bear in mind that bills don’t end at the asking price. Lawyer’s fees, local and national taxes, insurance, and so on, can often add at least a further 10 per cent to the cost of your acquisition.
Seek professional advice
Take independent advice from an English-speaking lawyer who is not connected to your seller, estate agent or property developer.