According to the Office for National Statistics (ONS), 352,000 people emigrated from the UK in the year ending June 2012, and recent research has revealed that almost half of Britons would like to move abroad given the opportunity. If you’re one of those who is moving lock stock and barrel to foreign climes, it’s important to do your research and to take the time to consider all the implications, particularly when it comes to property.
Here are a few tips from Conti, the overseas mortgage specialist, to help guide you through.
1). Think about renting a property, at least for a while, in your chosen country. This will give you time to work out whether the move is absolutely right for you. It also means that you can move around and try different locations until you find the one that suits you best.
2). Rent out your house in the UK. That way, you’ve not burned your bridges if you decide that you’d like to come back. It could also mean that you’re able to move more quickly as you don’t have to hold on until your property is sold. And once you know you’ve made the right move, you can consider selling.
3). Visit your chosen location several times, if practicality allows. It’s really important to see your chosen location in different seasons. It may be that you’ve fallen in love with a hot summer resort in Spain, but it can be very different during the winter months.
4). Do lots of research. Talk to expats who have moved to the area you like to get a better understanding of what it’s like to live there. Use online forums to help you do this – getting to know people who have already moved there can be a great source of information and advice. You must also look into all the details about healthcare, welfare rights, employment opportunities and education.
5). Obtain an AIP (Agreement in Principle). When it comes to buying a property, and if you need finance, get an ‘Agreement in Principle’ before signing any contracts, or paying a deposit. This will tell you exactly how much you can borrow, will prove that you’re a serious buyer, and you’ll be better placed to negotiate price. It’s tangible evidence that you can take along when house hunting and it can also lead to your application being fast tracked once you’ve chosen your property. And it costs nothing.
6). Never sign a contract you don’t understand. When buying a property, if two versions of the contract are provided (in other words, English and local language), ask your solicitor to confirm the English version is a true translation, as you need to ensure it doesn’t contain errors, omissions or extras. And always read the contract. Ensure you are fully conversant with the terms and conditions you are about to agree to.
7). Check the inheritance and capital gains tax laws of your chosen country. For example, it may be the case that your estate does not automatically pass to your spouse and you may, therefore, need to compile a separate will. If you take a mortgage out on a property in France or Spain, it may reduce your inheritance tax liability as there is a debt on the property. Seek professional tax advice so that you’re fully compliant and to take advantage of all the possible deductions.
8). Factor in extra costs. Bear in mind that the cost of buying a property doesn’t end at the asking price. Lawyer’s fees, local and national taxes, insurance, etc must all be met in your host country and can often add at least a further 10% to your cost of acquisition. Ensure you are, therefore, aware of the costs charged by the legal and government authorities for purchasing a property in your chosen country.
9). Seek specialist advice. Get independent advice from an independent English-speaking solicitor who is not connected to your seller, estate agent or developer. If required, you can also consult valuers, surveyors or architects. They should be proficient in your chosen country’s laws and processes and also know the specifics involved in buying a property there. One of the biggest advantages of taking out an overseas mortgage is that the lender will do its own checks on the property, ensuring that a proper legal title exists, that the property is registered in the buyer’s name and that a valuation of the property takes place.
10). Local money. Open a bank account in your chosen country before you start looking for a property. Set up standing orders to meet local bills and taxes. And beware of exchange rate fluctuations. Even small changes in exchange rates can make a big difference to the purchase price of your overseas property or your monthly mortgage payments.
Advice courtesy of Conti, the overseas mortgage specialist