The latest English Housing Survey reveals that 2.1m households reported having at least one second property, 40% of which are outside the UK.
Most of these households let their second property out but do they know how best to select and manage their overseas homes for let?
Insurance firm Intasure has shared specialist insight into things you must know before buying an overseas holiday home, including taking into account complexities in rules and regulations following Brexit.
1. Make your list of requirements
Before starting your hunt for a holiday home, make a list of must-have requirements of your property and the local area. The best place to buy a property ultimately depends on your needs. You need to think about if the destination is the right place for you. Things to consider include:
- How far are local amenities?
- How many people live in the area?
- Public transport options available
- Number of inhabitants
- Cost of living
- Weather
- Is the location family-friendly?
- What are the local restaurants and entertainment options like?
- Do you want a slower pace of life? Or are you seeking adventure/hobby options?
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2. Do your homework
Once you’ve decided what you’re seeking from an overseas holiday home, it’s important to do your homework on the property. You might see a property listed for a low price and think that it is a great option, however, think about why it may be so cheap. Spend time vetting out countries and areas before making a final decision.
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3. Spend time in the area
Once you’ve decided on the area you would like to purchase your second home. It’s recommended that you spend some time in the area. This will help you get a feel for it and ensure that you’re making the right choice before getting the keys to your new property.
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4. Finding your property
Many aspects can help when narrowing your search for your dream overseas property. Online property websites can show you many listings. It’s recommended to ask friends and family for any recommendations. Similarly, looking on forums for advice from people who have bought in your desired location can be beneficial. To make finding a property easier, consider seeking support from a local real estate company that will have more intimate knowledge of what is available. Local agents are familiar with the rules around purchasing a property overseas. Some of the latest properties may not be on the market yet, so it’s worth getting in touch with development companies to ask about any plots they have available.
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5. Legal investigations before buying
Once you’ve identified your dream property, you will need to undertake legal and structural investigations to uncover potential hidden issues. A sale can’t go through until the necessary checks are complete.
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6. Securing an overseas mortgage
The type of mortgage you secure depends on how you plan to use the property. If you wish to rent out your property on a short-term basis you will need a holiday let mortgage. Longer-term rentals will require a residential buy-to-let mortgage. Mortgages outside of the UK typically demand higher deposits and the cost will vary from country to country. The value of your deposit will depend on several factors, including the lender, your finances, and the amount borrowed. Put down a larger deposit, and you’ll likely receive more favourable mortgage terms and interest
rates.
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7. Make sure you have appropriate holiday home insurance
Once you’ve secured your property, it’s important that you consider home insurance to help keep your property safe. Policy details can vary depending on how you plan to use your second home. Regular home insurance may not be enough to cover you in case of any risks if your property is left for long periods of time. Holiday home insurance can help protect against building damage or losses at your property, even when you’re not there.
An Intasure spokesperson adds: “There are many reasons why Brits choose to buy an overseas holiday home from enjoying holidays with family to future retirement plans. It’s easy to get caught up when seeing your dream property listed online but prospective buyers need to consider these things before you buy.
“Following Brexit, depending on the local rules of each country within the European Union, there may be certain implications and requirements regarding homeownership. As a precaution, homeowners are encouraged to check the position in the country where their property is located, as rules can differ for non-EU citizens renting out a property in the EU.”
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