Over the years I have noticed a number of unwritten rules about writing for the trade press. In fact, penning articles for the trades can be something of an art form. First up, there are a number of do’s and don’ts laid down by commissioning editors which ‘authors’ (and I use that term in its loosest form) must abide by.
Top of the list tends to be the following don’t: do not use the article as a sales and marketing exercise to flog your product or service. The more discerning writers will take this information on board and then draw attention to everything an intermediary should look for which will handily coincide with all the features of the aforementioned product or service the writer was not allowed to make reference to in the first place.
There’s also another game you should play when opening a trade mag’s contents pages. Pick an article, for instance, ‘Buying at auction’ and see if you can guess what the opening paragraph will be or what it will make reference to. One unwritten rule seems to be that when writing about buying a property at auction, writers must begin by making reference to some or all of the following: the television programmes Homes Under The Hammer or Flog It, and David Dickenson. The phrase ‘cheap as chips’ must also be mentioned at least four times throughout.
Because this article is about helping your clients buy a property abroad. I’m suggesting it comes with the headline ‘Fun in the Sun’ in homage to my younger days when I would watch far too much TV-AM. I am also professionally bound to write the following sentence: ‘As the popularity of TV programmes such as A Place in the Sun prove, there is a growing number of people looking to establish a permanent base in sunnier climes.’ There, I’ve done it, I can now get on with the rest of the article.
The fact is, of course, that the sentence above is perfectly true. The lure of year-round sunshine coupled with the easier access to a growing number of countries that low-cost airlines now bring, means that more and more UK residents are looking to purchase a property in a foreign country. And it is just these types of people who will be contacting you, the mortgage intermediary, to seek out the information and products necessary for them to turn a dream into reality.
AMI assistance
Given the fact that the number of people looking to buy abroad is on the increase, AMI has published a factsheet aimed at assisting members with these clients. The Advising Clients Thinking of Buying Abroad factsheet can be used as a guide to grow your business and better advise these clients. It covers the issues that advisers need to be aware of in this market, although intermediaries should also do their own research into each country’s property and mortgage laws. This, of course, is the crucial point. Every buyer (and mortgage intermediary) should remember that buying abroad is not the same as buying in the UK and different countries have different practices, customs and local regulations.
The factsheet covers a number of areas, including a look at the main ways to buy a property abroad using borrowing. These are:
Increasing borrowing (if there is sufficient equity) on a UK home with a sterling denominated loan. This may be the cheapest and easiest route and, for most borrowers, avoids the currency and legal risks of borrowing abroad.
Increasing borrowing (if there is sufficient equity) on a UK home with a foreign currency denominated loan. This introduces a currency risk but it may be acceptable if the customer has income in that currency.
Borrowing money on the security of the overseas property with a sterling denominated loan. This will be subject to local law, not UK law.
Borrowing money on the security of the overseas property with a foreign currency denominated loan. This has both currency and local law risks but has the advantage that local expertise and practice may be a benefit.
The factsheet goes on to cover the area of ‘currency risk’ and what it will mean for your client taking out the mortgage loan.
Potential risks
It is also prudent for the intermediary to make the client fully aware of the potential risks involved in buying a property abroad. Has the client considered these? Why do they want to buy a property abroad? And what factors are important to them in deciding on this option? Has sufficient thought been given to the following questions:
Can the client afford it?
How stable is their chosen country politically?
What would happen if air travel became significantly more restricted or expensive?
What contingency plans do they have, for example, what would happen if they became ill or disabled, or lost their job?
These are considerations that a client high on the ‘dream’ of buying abroad might not have given too much time to, but they must be considered and confronted if the purchase is not to become fraught with difficulty.
There are many reasons why buying a property abroad can make sense, but both buyers and mortgage advisers need to take great care to make sure the process goes as smoothly as possible and is not regretted later. Using the AMI factsheet as a starting point, intermediaries can help ensure their clients find their very own Place in the Sun.
There I go again.
AMI members can access the Advising Clients Thinking of Buying Abroad factsheet in the publications section of the AMI website.
