Truth behind buying property abroad as restrictions are relaxed

 

Chaos reigns supreme for property buyers abroad this spring – normally the prime overseas buying season.

It was widely publicised that overseas travel has been banned until 30th June, with British people who try to travel abroad without a reasonable excuse facing a £5,000 fine.

However, within the legislation is an exemption for those who are buying property abroad. Moreover, there is also the “reasonable excuse” of preparing an overseas property you already own for rental. This has been dubbed the “Stanley Johnson clause” after the Prime Minister’s father made trips to Greece last summer, he said, on “essential business trying to Covid-proof my property in view of the upcoming letting season”.

While it may now seem clear that you can travel abroad to view, buy or look after a rental property, the other essential factor to consider is the other country’s rules. With the “English variant” of Covid-19 already driving a third wave on the Continent, other countries are understandably nervous.

Most European governments are, therefore refusing entry to British people who are not resident. According to the rules laid out by the Spanish government, while certain transport, healthcare, sportspeople and others are allowed, there is no mention of viewing or buying property as a legitimate reason to travel there.

This is, however, a fast moving situation, and we know that countries such as Cyprus and Greece are very keen for healthy, vaccinated and tested British people to fill their hotels and tavernas as early as mid-May.

Virtual viewings and sales

You do have options to buy even without traveling abroad. Over the past year processes have simply moved online. All the usual functions such as legal arrangements, notaries and currency transactions are continuing as usual.

Estate agents have been creating video walk-throughs, while home-hunters even from different continents have become adept at checking out areas via Google maps, satellite images and local forums.

There is the risk of making a mistake, but you can mitigate that by employing a local surveyor or architect to check over the property for you. Engaging a dedicated, independent solicitor who speaks your language is essential too.

You can also make the sale contingent on making a physical viewing within a cooling off period when travel is allowed. At Property Guides we have helped many people to make offers and even complete during the lockdown.

Property markets

One of the most astonishing factors over the pandemic year has been the rise in property prices in many countries.

In the UK, despite the economy shrinking by around 7% in 2020, house prices rose by nearly as much. Part of that will be down to the stamp duty holiday, but the same pattern has been repeated around the world.

Prices have risen by double digits in New Zealand and Germany, and by 5-9% in the US, Canada, Portugal and others.

While some have fallen, and you cannot always rely even on official data, for now many homeowners and estate agents are refusing to see the crisis as an excuse for a fire sale.

Even so, clearly with many rental owners losing two summers of rental income, and with no guarantee there will not be further “waves”, many will be keen to sell up.

Christopher Nye, Senior Editor at Property Guides, said “Now could be a good time to make an offer on a property.

“If doing so, the evidence is that properties in the suburbs or close to big cities, with outside space, are at a premium. A recent report from the LSE found that while there had been no rush to the countryside, there certainly was a strong desire for outside space.

“Overseas too, there could well be a greater desire for self-catering rental accommodation rather than large hotels.”