SPECIAL FEATURE: A world of opportunity
Winter often acts as a catalyst for people seeking a little slice of life in the sun, and the wettest January on record may well have prompted many more than usual to make their dreams of a home abroad a reality.
Frankly, there probably couldn’t be a better time to go for it. A timely combination of excellent lending conditions, bargain property prices and a strong pound are making it much more affordable for British investors. And it seems that hordes of prospective buyers who have been sitting on their hands for the last few years are deciding to go for it before they miss out on the best deals.
Interest in purchasing overseas property surged in the UK during 2013, according to the Overseas Guides Company, which saw overall enquiries for the year increase by 33 per cent compared with 2012, with growth driven by key European destinations. The new overseas property hotspots are, in fact, the old favourites with Spain and France topping the list.
Confidence appears to be returning to the Spanish property market at last with British buyers returning in their droves. A joint report by PriceWaterhouseCoopers and the Urban Land Institute says that Spain had transformed from ‘property pariah’ to ’star market’ by the autumn of last year, with the revival expected to continue in much the same vein in 2014.
Prices in some of the most desirable areas of the country have fallen by up to 50 per cent since 2007, but after a very difficult few years, prices are starting to creep back up in some areas, and people who have been watching the market are snapping up bargains while they can.
Peter Birkett from Property Repossessions Spain, said: ‘Confidence amongst UK buyers is definitely returning, and current market conditions are convincing many of those who have been holding out for the last few years to make the purchase. The Costa Blanca, the Costa Almeria and the Murcia area proving to be very popular.
‘We currently have a number of three-bed villas with sea views in Mojacar with a sale price of €160,000, down from an original price of €398,000, and some four-bed villas in the same location which are selling for €199,000, down from €465,000. Bargains like this won’t last forever.’
Despite the recent boom and bust nature of the market, Spanish lenders are still willing to provide finance to foreign nationals, particularly if they can prove that they have a sound financial profile. Clients can generally borrow up to 65 per cent of the value of the property, and rates currently start from just 3.22%.
La belle France
The situation in France is also very good. A slower property market has been pushing prices down, and under current market conditions, vendors are more likely to be receptive to offers lower than the asking price.
Although France has been weathering the global financial storm pretty well, French lenders have understandably become slightly stricter about whom they lend to, and it’s important for your clients to have their accounts in good order. Mortgage rates are at their lowest in more than 60 years, starting from just 2.1% for a variable mortgage over 10-years, and 3.75% for a 25-year fixed-rate mortgage.
And unlike many countries where the best rates are limited to those with the biggest deposits, both of these deals, and many others, are available for mortgages of up to 80% loan-to-value.
The fact that loan-to-value levels are still this high is a reflection of how stable the French mortgage market is, and has been throughout the recent global downturn. Lenders have found themselves in a relatively strong position thanks to the caution they have exercised in the past.
Strong pound giving buyers more bang for their buck
Thanks to the pound rising against the euro to a very nice €1.22 (at the time of writing), homes in popular euro zone destinations have just got even cheaper for British buyers, giving them more buying power and money in the pot.
To put this into property terms, we can compare it with last summer when the value of sterling was around €1.14. It means that for someone considering a home worth €200,000, the property now costs £163,934 compared with £175,439 at the start of August 2013. That’s a saving of £11,505, which is really pretty good.
Sun, sea and mortgages
There are many reasons to tap into the overseas mortgage market, not least the valuable commission-earning opportunities. One of our most recent top earners pocketed an impressive £1,094 in commission from a Spanish mortgage.
This timely combination of excellent buying conditions won’t last forever and could be too good to ignore. It can be a really easy earner for you too – we handle the case while you get on with the day job.