Buying property in Portugal has become even more affordable thanks to mortgage rates being slashed by up to 1.5% this month. Mortgage deals available through Conti, the overseas mortgage specialist, now start at 3.35% for a variable rate of up to 30% loan to value and 3.4% for a variable rate of up to 60% loan to value.
The financial crisis of 2007 left the Portuguese economy reeling and property prices collapsed by more than 30%. The country’s economy has now stabilised, however, and residential property values increased nationally in 2014*. But prices are still generally below pre-recession levels, so investors, feeling more confident about the future and buoyed by the growing strength of the pound, are making their move while there are bargains to be had.
Foreign buyers, in fact, accounted for more than one in five sales last year, and it’s Britons who are leading the charge, followed by the Chinese and French. It’s perhaps no surprise, therefore, that Portugal is currently third on Conti’s list of hot spots, after Spain and France. Property is bouncing back and it remains a buyer’s market in most areas.
Clare Nessling, director at Conti, says: “After years of stagnation, Portugal’s property market is on the up again at last. The reduced cost of funding together with continued interest from Portuguese lenders to assist non-residents to buy property means that many deals are becoming cheaper. And this is providing an even greater incentive for people to invest.”
The Portuguese property market has also been boosted by the success of the Golden Visa scheme, which was launched in 2012 and grants residency status to non-EU citizens who purchase property worth more than €500,000.
Current best buy mortgage rates for property in Portugal available through Conti
|Interest rate||Product type||Max LTV||Repayment method||Minimum loan|
|Fixed – 5 years||80%||Repayment||€50,000|
All rates correct as at 31st March 2015
Conti says that the timely combination of historically low interest rates, bargain property prices and a strong pound has been luring British investors back to the overseas property market in their droves. In the first two of this year, it has seen enquiries increase by 39% compared with the same period in 2014.