Determined to make 2023 the year you buy a holiday home or move abroad? Before heading out to view properties and realise that dream, there’s important groundwork to be done first. Here’s our checklist of things you should be thinking about now. Follow these steps and you could be in your new home by summer…
1. Establish your budget
Take time to work out what realistically you can afford to spend on a foreign property in 2023. Until you know this, most foreign agents won’t prioritise you as a serious client – how can they?
Many will be intending to buy outright with cash, whether from savings, inheritance, the proceeds from equity release or the sale of a UK home. Just remember though, until you know for sure how much your funds are worth in both sterling and the local foreign currency, you don’t really know your true buying power.
Remember too, there will additional buying costs on top of whatever purchase price you agree. In much of Europe, high transfer taxes (equivalent to UK stamp duty), the addition of both notary fees and agency fees (usually paid by the buyer), not to mention the usual legal fees and other disbursements, mean these costs are typically higher than in the UK. Your independent lawyer or property agent will be able to offer guidance on this.
2. Mortgage in mind?
Are you planning to buy with a mortgage? If so, start talking to a mortgage broker asap so they can begin the application process. The aim is to get you an agreement in principle before you head out to view property. Doing this makes you a credible buyer in the eyes of agents and vendors and means you can move quickly when you find the right property.
The good news is, mortgage rates are still very low in Europe, thanks to European Central Bank rates remaining at historic lows.
Viewing trips are easier with the groundwork already done
There are a number of benefits to using an overseas mortgage broker. They will guide you through the application process, offer you a choice of products from a variety of lenders, many of which will be exclusive to them, negotiate the product and customise any add-on products for you and generally add another layer of due diligence to the purchase process.
Keep in mind the economic landscape when you’re calculating what mortgage repayments would work for you. Interest rates in the UK have risen, with Europe potentially following suit, while inflation is also pushing up living costs. Building more of a cushion into what you can afford might be a wise move.
3. Get browsing!
You know the resort or area where you’d like to buy and you have a ballpark for your budget. Now the fun bit can begin – searching for your perfect property. You can start browsing online.
Start by using the PropertyGuides.com search tool – taking note of the useful feature that illustrates how a property’s sterling price has changed over the past six months. Before long you’ll develop an overview of the areas and types of property that match your wish-list and budget. Send us an enquiry about any property that you like and we can put you in touch with the relevant estate agent.
Find your perfect home in your favourite country by clicking on the link: France, Spain, Portugal, Italy, Cyprus, Greece, USA, Canada, Turkey, UK, Ireland…
4. Connect with an agent
Looking online is a good starting point and helps you get an idea of typical prices in local markets, but it can only tell you so much about specific properties.
When you’ve found listings that you like and sent an enquiry about them, the next step is making contact with the appropriate partner estate agent. They will evaluate your preferences and budget, and advise on how suitable your property choices are. Their on-the-ground knowledge and experience make their guidance at this stage invaluable. It is likely they will suggest other properties that match your wish-list, all the while respecting the properties you have chosen.
5. Visas and residency
If you’re planning to move abroad permanently, start thinking about your route to getting residency status in your new country and what visa requirements will apply to you. Now that UK citizens no longer have EU citizenhsip status and are classed as third-country nationals, this applies even if you are moving to a popular European country, such as France or Spain. In most European countries, golden visas offer a way to gain residency through buying property of a minimum value. Other options for retirees include non-lucrative visas, which grant residency to applicants who can prove sufficient funds to support themselves and dependents without the right to work or employment
Your independent lawyer should be able to advise and assist with residency permits and suitable visas. Again, this is a process that can take time, so it’s never too soon to appoint a lawyer and discuss options with them.
6. Travel rules
Another consequence of Brexit and the UK’s loss of freedom of movement within the EU is the rule governing how long Brits can spend in Europe. Now, non-resident Britons, or those without a suitable visa, are limited to spending 90 days within a rolling 180-day period in Europe, or more specifcally the Schengen Area, which includes all popular property destinations. Be sure to consider this when planning your viewing trips and how this could affect how seasonal you want visits to your new property to be.
7. Focus on finances
For anyone moving abroad permanently, it’s never too soon to start financial planning and considering tax implications – a careless decision early on can cost you money further down the line. Depending on the complexity of your personal situation, it could be worthwhile employing the services of a financial advisor.
Planning your property budget comes first
For example, you’ll need to think about any private pensions you have and what to do with them once you’re no longer resident in the UK – it could be they work harder for you transferred into a QROPS (Qualifying Recognised Overseas Pension Scheme) rather then left in a UK plan. If you have shares, bonds or ISAs, take advice on what to do with them too. Ensure too that you remove yourself from the UK tax system in the most beneficial way available to you. A tax expert will be able to assess your position for the tax year of your departure and help you claim all of your UK allowances and any income tax refunds you might be entitled to.
8. Be bold – plan a viewing trip!
Sit down with your partner now and decide on possible dates for flying out to do viewings, all the while conside– you don’t even have to decide where exactly you’re flying to, just reserve some dates. You can then discuss your visit with your property agent and when you’re ready, get on and book flights and car hire. As always, the sooner you book flights with the likes of easyJet and Ryanair, the cheaper they are and the more availability there is! Avoid the half-terms if you can, unless you’re taking the kids.
When it comes to buying property overseas, there’s nothing we recommend more than going on a viewing trip. Physically seeing the property can avoid wasted time, money and buyer’s remorse. Download your free guide to planning your viewing trip.
9. Concentrate on currency
It’s never too soon to plan how and when you will exchange your Sterling funds into euros, dollars or any other currency that you’ll use for your future property purchase or relocation. Ongoing economic uncertainty, along with the conflict in Ukraine, has caused substantial volatility in exchange rates so far this year. Opening a no-obligation account with Smart Currency Exchange will allow you to talk for free to a currency expert, who will outline different solutions for transferring your money abroad and minimising your exposure to the exchange rate.
10. Use our guides
Our guide is the perfect tool to prepare you for all of the above. If you haven’t already read it, download it here today.