By Melanie Wright
Spain remains the most popular destination for Brits looking to buy a property abroad, and has recently been identified as the healthiest place to live in Europe.
The country accounted for just under half (46%) of enquiries received by overseas mortgage specialists Conti during 2015, boosted by low mortgage rates, the strong pound and renewed optimism among buyers. Separate research by the World Health Organisation shows that Spain enjoys the best health and life expectancy of any country in Europe.
Clare Nessling, director at Conti, said: “It wasn’t so long ago that the Spanish market was shrouded in doom and gloom, but the market has turned the corner at last and excellent buying conditions are luring investors back. We’re also seeing buyer’s markets in France and Portugal, and there’s been a general lift in confidence among buyers who are returning to these traditional markets in their droves.”
However, although the strong pound worked in the favour of buyers’ purchasing property in Europe last year, sterling has got off to a much bumpier start in 2016. With the EU referendum looming, this volatility is expected to continue, which could prove expensive for anyone hoping to buy in Spain over the next few months.
Charles Purdy, chief executive of foreign currency specialists Smart Currency Exchange, said: "The prospect of the UK leaving the European Union has been causing volatility in the strength of Sterling since the end of last year. For this reason, forward buying euros makes a lot of sense for British people purchasing in Spain right now, as it removes the worry about what the exchange rate will do during the purchase process.”
If you’re not planning on making your property purchase until later in the year, and are worried about currency fluctuations, many currency specialists allow you to lock in favourable exchange rates before the deal actually goes ahead.
Mr Purdy said: “A typical scenario is a client taking out a what is known as a ‘forward contract’ with us once they have agreed the euro purchase price of a Spanish property, knowing the sterling cost to them won't change before completion day."
If you are considering buying a home overseas, as well as considering the impact of currency volatility, remember to factor in all the additional costs involved and not just the purchase price itself.
Ms Nessling said; “Bills don’t end at the asking price. Lawyer’s fees, local and national taxes, insurance, and so on, can often add at least a further 10% to the cost of your acquisition.”
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