Do your holiday home research
As always, there are winners and losers on the property market rollercoaster and background research is key.
If you can afford to buy while the exchange rate’s good, and are prepared to sit tight, you may find you’ve got a good investment.
But many people don’t have that option and the combination of Eurozone jitters, squeezed household budgets and a fall in rental income means that waiting for the markets to improve isn’t an option.
Some reports suggest a sharp rise in the number of people selling their second or holiday homes at a loss since the turn of the year, particularly in Greece and Spain.
However, property markets fluctuate so do seek professional advice if you're considering buying or selling overseas, rather than making a hasty decision.
Clearly, it’s a buyers’ market if you can afford to play a waiting game or are prepared to take a gamble. However, just because something’s a bargain doesn’t necessarily mean it’s a good idea and that charming cottage in a quaint French hamlet may become a financial millstone.
Who's it for?
Probably the most important consideration is whether you’re buying to rent for income or for family holidays.
Right now, the rental market’s depressed and the cost of fuel and fares hasn’t helped so location is vital.
Many people caught a cold by buying properties near to budget airline destinations only to find timetables changed or services were withdrawn that ruined hopes of short breaks and rental income.
Research is absolutely key, local people in shops, bars, cafes and the town hall will know what’s going on and what’s on the market.
They’ll know about transport, tradesmen and what it’s like in the depths of winter. You might get early warning of family disputes over land or property rights that could make buying and selling more complex.
There may be other expats around who’ve experience of ‘ second homing’ and useful contacts for local people to manage, maintain and clean the property.
Leisurely lunches, siesta time and that different pace of life we all fall in love with often belie the complex, formal and lengthy procedures involved in buying property abroad.
You need to understand the implications of making an offer, what happens when it’s accepted and how deposits, disputes and contracts are dealt with.
Find out how the system works and engage an impartial, specialist lawyer who can take you through the process which will be very different to the UK.
Ideally your lawyer should speak fluent English as well as the language of the country you’re buying in; they will engage the services of a notary or local civil servant and should be able to deal with multiple sellers as in the case of children selling a family home.
While you’d be a rare soul to be fluent in legalese in a second language, it’s common courtesy to make an effort and invariably helps in meetings and negotiations.
You’ll need to think about insuring the property for you and for rental purposes.
Think about the contents and any valuables that are going to be left unattended for weeks or months at a time, what happens during building or maintenance work and security of the property.
All much easier if you can deal with a company that’s UK based but expert in holiday homes.
Bills, payments and tax liabilities
It’s easier to manage finances from a bank in local currency and all your local ‘council tax’ and utility bills, including telephone/internet lines, should be paid that way. Regular overseas money transfers from the UK can cost as little as a few pounds a month.
But, if you're bringing money back to the UK, it's advisable not to use the local bank, but a reputable and secure, UK based international payment system. .
Don’t forget that all your income and expenses will need to go on your UK tax return.
Overseas property is usually part of your estate so may fall under the parameters of your own UK Will but you might need to make a separate Will in the purchase country (in both languages ideally).
Failure to do so will mean that your family falls prey to local laws and Inheritance Tax.
The best advice is to research, research some more and take professional advice on all the financial, tax and other implications of owning a home abroad.