Many people dream of having a house in a foreign country for many reasons, ranging from having their own holiday home to making a savvy investment.
But regardless of why you want to buy property overseas, it can be a complicated and risky venture. So, what do you need to know for the best chances of success?
In this article, we’ll share three tips for buying a house abroad.
1. Get your finances in check
Foreign mortgage providers might be able to offer you a lower repayment rate. But on the other hand, you won’t have to worry about fluctuating exchange rates or regulations with a UK lender. Whichever option you choose, you should work on building your credit score so you can get the best rates possible.
Deposits are often larger percentages of the property value overseas, so it’s wise to save as much as possible. You’ll also have to contend with extra costs when buying property overseas, such as shipping costs, international bank transfer fees and additional legal fees. Having a larger pile of savings will help with all of this.
2. Understand the risks
Purchasing property is risky, even in the UK. But you’ll have to deal with extra risks when you’re buying a house abroad, including but not limited to:
- No UK regulations: Since property transactions outside the UK aren’t regulated by the Financial Conduct Authority (FCA), it could be much harder to gain compensation should anything go wrong. For this reason, it could be wise to use a UK-based mortgage provider.
- Unfamiliar laws: Some countries have laws that might seem strange or even unfair to Brits, so don’t take anything for granted or you might get caught unaware. Ensure you work with a lawyer who’s familiar with the local law and conducting international transactions.
- Poor communication: You could fall into costly misunderstandings if you’re not fluent in the local language. You’ll need to employ someone else to help make sure communication goes smoothly. Ideally, your lawyer should speak the language – but you’ll still need a translator if not.
3. Get independent advice
Only take advice from people that are completely removed from the other parties in the transaction, including the seller, developer and estate agent. You don’t need to be paranoid, yet you should also be aware that taking advice from people recommended by others involved in the deal might not have your best interests in mind.
Consider working with a registered UK legal firm that specialises in international transactions and property conveyancing. The alternative is to find English-speaking professionals in the country, which you can do via the British Embassy website.
Buying a house abroad isn’t without its challenges and risks. But you can give yourself a better chance of success by implementing our tips above.
