Possibly the most talked about subject in the British Isles, more so than football, soap operas or even the current ‘credit crunch’ is the weather.
It is a cliché, but the world is becoming a smaller place. Budget airlines have ensured that travel has become cheaper and a variety of places have become more accessible than ever before. This doesn’t just refer to people holidaying. More and more people are looking overseas to live, work, purchase a holiday home or all of the above. A growing number of people are looking away from British shores towards a different lifestyle and life abroad.
While not wanting to dwell too much on the current state of UK financial services following the problems in the US non-conforming market, the current financial, as well as meteorological, climate makes it even more important that UK mortgage intermediaries look at diversifying into different areas of the market.
In the UK, the high cost of housing continues to exclude first-time buyers from the property market and there remains some uncertainty regarding the future direction of interest rates. The overseas market continues to expand, underpinned by the European Union’s expansion, cheap flights, high domestic prices and diminishing returns from the UK buy-to-let sector.
With overseas developers targeting the UK and more Britons looking to buy abroad, it makes more and more sense for brokers to become active in the overseas market.
Viva España
Spain is still the most popular destination for Brits travelling abroad, according to research. It is an established destination which people know, and are comfortable with the surroundings and lifestyle that it offers.
It is easy to get to as it is now serviced by 28 airports from the UK and with a relatively short flying time and such a close proximity to the UK it means that it will remain a primary destination for the foreseeable future.
When talking about the property market in Spain, for UK investors, we mainly refer to the Costas – Costa del Sol, Costa Brava and Costa Blanca, for example – rather than Spain generally. The Balearic and Canary Islands are also becoming increasingly popular places to buy.
But it is not only the beach properties that are popular. There is an increasing popularity for properties situated on or around professionally designed and beautifully manicured golf courses. The potential of areas with nearby well-designed and attractive golf courses is increasing all the time, and with Spain historically being replete with quality golf courses, this will only help to serve the market. These are also generally not far from the coast, but make for a different proposition than resort complexes.
Inland Spain is also increasing in popularity, as people are looking further a field from the still popular Costa developments. Inland Spain represents an opportunity for better integration with Spanish life and more square feet of property for your euro.
Indeed, people are spending more and more time in their overseas properties. A recent survey reported that 68 per cent of those who own property in Spain expect to use it for a quarter of the year while 38 per cent of Britons who buy property abroad do so in Spain.
Difficulties
The main difficulty most prospective buyers and brokers experience in the house buying process is, inevitably, language and the use of different jargon, such as evaluators rather than surveyors, and notaries rather than solicitors or conveyancers. These problems can usually be overcome by using a UK bank with an international arm and a bilingual lawyer.
Brokers need an understanding of the Spanish market and, importantly, access to a bank with experience of dealing with British non-residential customers, if they are to offer clients the level of service they have become accustomed to.
If a broker is looking to get into the overseas market, we urge them to work closely with a suitable and trustworthy financial institution. This relationship will enable you not only to service your clients need in this particular area but it will also breed confidence and generally speaking enable advisers to retain any future business.
Using a well-known UK financial institution helps breed this confidence as clients recognise the brand which helps to extinguish a great deal of apprehension in buying a property abroad.
Sound advice
Ultimately, the key for a specialist in this sector is to provide buyers with sound advice and guidance throughout the process. It is becoming increasingly important for such specialists to offer a wider range of services, and UK lenders will continue to see a greater number of requests for mortgages in Spain, which will ultimately put more business into the hands of mortgage intermediaries specialising in this sector.
There seems to be no let-up in Britons’ desire to own a place in the sun, but with widening horizons, deciding where to buy becomes more complicated. Sometimes the choice is between established markets with a track record of rental returns or emerging but unproven areas offering higher yields.
People will always buy for different reasons but now it seems much more for the emotive reasons. For those people who want cheaper family holidays long-term as well as an economical and time-efficient escape for the weekend, then Spain is a country that remains high on people’s wish lists.
