At a time when property prices in many dream holiday destinations are looking good value, Smart Currency Exchange is warning Britons tempted by the dream of overseas home ownership not to let their hearts totally over rule their heads.
The foreign currency expert whose clients include thousands of overseas homeowners in Europe and further afield, said that with tens, and sometimes hundreds, of thousands of pounds at stake, the decision to buy needs to be as much commercial as emotional.
‘Every year, hundreds of thousands of Britons in holiday hotspots dream of buying a permanent base. The difference this year is that property prices in many destinations are looking good value and people are feeling more confident,’ said Charles Purdy, director of Smart Currency Exchange.
‘People who buy abroad do want to live the dream and it is an emotional decision. But there are so many pitfalls that it’s only by being practical that the dream will come true,’ he added.
Property prices in many places in France, Spain, Portugal, Cyprus, Turkey and the United States are looking good value and starting to attract bargain hunters.
Charles Purdy said that from talking to clients who have bought properties abroad there are several key lessons it is better to grasp up front than to learn the hard way from bitter experience.
He advises having an exit strategy. ‘Only go into the deal knowing how you would get out if the worst happens. Dreams do fade, people and their priorities change, finances can deteriorate, travel become more difficult. This is vital for those retiring abroad who are often forced by health, bereavement or family circumstances to come back to the UK,’ said Purdy.
He also pointed out that fabulous summer destinations are often cold and dreary at other times of year. ‘Always visit off peak to see how easy the transport links are and whether the shutters go up for nine months. Consider doing a try before you buy deal to rent in a location for a few months before splashing out,’ he explained.
He also advises potential buyers to talk to locals and although it is not very British to approach strangers, an hour spent chatting to expats and potential neighbours about a community can give you vastly more insight into the pros and cons than a quick two week break.
Buyers should also be aware of future development potential. ‘A room with a view is priceless, until the scenery disappears behind a new development. Buyers need to choose wisely to ensure that beautiful panorama remains to be enjoyed and to help underpin the value of the property,’ he said.
And seeking independent advice is also a good idea. ‘It is worth paying more to ensure lawyers, estate agents, surveyors, etc, are truly working for you. Trade shows are a good way to find properties but also to meet reputable companies based in the UK who have the overseas expertise to manage the buying process and help you move and settle in,’ added Purdy.
He also pointed our that that the up front and ongoing costs of owning a property abroad can be considerable, plus the pros and cons of a different tax jurisdiction need to be understood. ‘Foreign exchange companies can save a fortune on transfers compared to banks and offer currency strategies to reduce risk. Many overseas buyers say it was one of their life’s best decisions from a family lifestyle and financial point of view,’ he explained.
‘Buying abroad is fantastic and becoming more accessible but not something anyone should do on a whim. Intelligent planning can make the difference between dream and disaster,’ he added.