Foreign Lands of Opportunity for Brokers and Buyers

Published: 29/06/2011

While the sun currently shines and an apparent heat wave beckons, the sceptics amongst us have only one question on our minds; “How long will it last?” And it is this attitude that forms the basis of buyers seeking not only pastures new, but pastures dry, hot and ultimately more reliable than our own climate.

So it is no surprise why so many people aspire to own a property overseas, a holiday home hotspot to escape to when the inevitable rainclouds invade the UK skies.

While a property abroad was previously little more than a pipedream, it is now a more tangible reality. A significant decrease in overseas property prices (up to 50 per cent in some instances) and low interest rates are aiding client aspirations and uncovering a lucrative additional income opportunity for brokers.

According to a recent study by Aviva, 46 per cent of 18 – 45 year olds are contemplating a permanent move abroad. This is a year-on-year (YOY) increase of 7 per cent while a further 21 per cent are thinking about a move within the next three years. The principle contributor seemingly being government cuts (54 per cent).¹

Quality rather than quantity

But while the numbers offer some hope, what is more promising is the legitimacy of the interest. Given the nature of the topic, it is not surprising many enquiries are nothing more than whimsical fantasies, temporarily inspired by the latest episode of A Place in the Sun or other such programmes. However, the current market, whilst fewer in numbers, is higher in worth.

Mark Nicholls, Operations Director at Viva Costa International Mortgages explains:

“We don’t receive the same level of frivolous enquires any more. There are still plenty of people looking to buy property overseas and there is a perception that now is a good time to do as prices have come down across the world.

“Prices can’t come down much further and if they’ve hit the bottom there’s only one way they can go, and that’s up. Now is the time to find a bargain.”²

Where in the world

France is the most popular destination, accounting for 45 per cent of the total enquiries in 2011 (up 31 per cent from 2008). Second is Spain with 28 per cent of enquiries (up by 13 per cent) and third is Turkey which accounts for 11 per cent of the year’s enquiries to date.²

Competitive interest rates are only aiding interest; in France interest rates are as low as 1.89 per cent, Spain from 3 per cent and Turkey from 4.30 per cent.²

A combination in high Loan-to-Value mortgages (LTV) and low property prices in Spain, following the financial crises, has resulted in a large number of repossessions while Turkey’s entry into the European Union are further reasons for the current UK interest.

These traditional favourites are by no means alone though; Florida remains a key destination as the Sunshine State’s property market has also suffered a massive dip of late while the Caribbean and Cape Verde Islands too offer promising investment opportunities.

An untapped resource

Many brokers are put off by the international property market. On first glance it can appear a daunting prospect; the language barrier, unfamiliar foreign taxes and legal systems and longer completion dates are three of the primary reasons why many ignore this market. But this is where Goldsmith Williams Overseas Ltd (GWOL) can offer a lucrative helping hand.

GWOL, a separate company but wholly owned by Goldsmith Williams, is able to offer you and your clients a full and comprehensive overseas legal service in 14 countries including European favourites France, Spain, Turkey, Portugal and Italy as well as far flung destinations such as Dubai, South Africa and Cape Verde Islands.

You and your clients will benefit from local lawyers who understand the laws of the land, checking the property has title, planning and legal registration, just as a UK solicitor would do here.

For more information about how Goldsmith Williams could help you seize the overseas opportunities, call us on 0845 373 3737.

Sources:
¹Aviva (April 2011)
²Mortgage Strategy (June 2011)

Content correct at time of publication