A guide to buying a property overseas

The dream of owning a property overseas is, for many, on a wish list. OnTheMarket.com outlines considerations for potential buyers.

A chic chateau in France, a tumbledown cottage in Italy, an apartment in sunny Spain or a coastal retreat in some other far flung destination – they are all tempting in their own way. Visit OnTheMarket.com – Overseas to view a selection of homes abroad for sale.

Thousands of Britons already live the dream while others have often thought about snapping up a bolthole in the sun. Buying property overseas can be a challenging exercise and, if you want to reduce the risk of problems, you need to do some basic homework. Here are some considerations:

1. Only buy property in countries/areas which you have visited and feel you know. You should visit at different times of year because some locations change fundamentally with the changing seasons. “If you are buying in the Mediterranean, you should start your search early in the year, preferably in winter before the main letting season,” says Jelena Cvjetkovic, Associate Director at Savills.

2. Take advantage of currency fluctuations and only buy at a favourable point in the exchange rate cycle. The pound is still very strong relative to the euro, although the possibility of Brexit may change this.

3. If you are buying with a mortgage, investigate lenders in the country where you are considering buying property. Some offer more favourable terms than some British lenders.

4. Many people are dependent on rental income from their property overseas, so research the local rental market, and make a realistic assessment of how much annual rental income you can expect to earn. As with all buy-to-lets, make allowance for periods when the property is empty.

5. Familiarise yourself with the property-buying process in the country you are interested in, and engage a lawyer with local expertise. You will need their help in acquainting yourself with local property taxes. “There are countries such as Portugal which have tax regimes that are extremely favourable to non-doms,” says Mark Harvey of Knight Frank’s international department. “It is a factor that can have a huge impact on your investment.”

6. If you are going to visit your property regularly, make sure that it is reasonably accessible. You do not want to commit yourself to 24-hour drives or to using airports that only have flights to and from the UK in summer. Also look out for areas where new airports are planned to open. You will need to move fast, but that little place in the sun may turn into a ‘nest egg’ down the line.

7. What will happen if you fall sick? It will be reassuring to know that you are close to a good hospital and, ideally, living in a country where UK citizens receive free/affordable medical treatment. There is a lot of useful basic information at NHS England.

8. If you are buying in a non-English-speaking country, learn the fundamentals of the local language as quickly as possible, otherwise you may end up socialising only with expats. Invite the locals around for supper, drinks or join local clubs to engage with the community. It should be simple common sense, but it is surprising how many purchasers of overseas properties choose to ignore it.

9. Are you thinking of buying a property off-plan? The brochures can look great and the arithmetic is tempting. But always do your research to ensure your new development does not turn out to be a mirage. Some people prefer to wait until a development has ‘bedded-down’ before investing. Other people may choose to talk to a reputable developer if they are thinking of going down the off-plan route.

10. The old rule of ‘use your heart as well as your head’ should never be forgotten. It applies to whether you are considering a home in the UK or overseas. Buying a property that proves an unsound financial investment is a lot less galling if it is in a country you love. Think of an overseas property as primarily to do with lifestyle – a lifestyle that appeals to you – and you will not go too far wrong. “It is not for everyone,” says Knight Frank’s Mark Harvey. “You need to be adventurous and thick-skinned, rather than fixated on the idea of an overseas property as an investment.”


Content provided by OnTheMarket.com is for information purposes only. Independent and professional advice should be taken before buying, selling, letting or renting property, or buying financial products.

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