Which? launches buying abroad guide
In recent years, the number of people in the UK who own a second home overseas has grown enormously. Over a quarter of a million people owned such a property according to 2003/04 figures and the number today is likely to be considerably higher.
Estate agents, lawyers and property management companies all have a vested interest in customers signing on the dotted line – regardless of whether the property is appropriate or affordable.
Borrowers may be tempted to ‘bend the truth’ about their income and outgoings, but the lender has the security of knowing it could repossess a UK or overseas home if the loan is defaulted.
No matter how cheap an overseas property may first appear, it will almost certainly turn into a big financial commitment. There will be no-one to sue if hoped-for rental yields and capital growth do not arise. Markets for second homes are often the most volatile.
Failing to commission adequate property surveys, apply for the proper planning permissions and take proper legal advice can leave consumers vulnerable, so such issues must be an absolute priority from the start.
Jeremy Davis, author, Buying Property Abroad, said: “The TV shows that have helped fuel our obsession with overseas property make buying abroad look easy. But in reality finding, purchasing and owning overseas can be a time-consuming business, and turning a foreign property into a successful investment can be even more of a struggle.
“Get all this right and you could have a wonderful new asset which gives you and your family enormous enjoyment over the years, and greater wealth in the long run. Get it wrong and you could be risking a good chunk of your future security on a pipe dream.”