Foot on the Property Ladder? First time buyer options?

November 28, 2012

First time buyers may at times feel they have the odds stacked against them, with an unpredictable property market in the UK and challenges in raising finances.

But maybe it’s time to look at things another way?…

There is real potential for those looking to get a foothold on the property ladder, but here’s the twist, by doing it abroad.

First Time Overseas Property BuyerThere are some fantastic opportunities on properties abroad which offer a realistic and affordable option for home buyers looking for a return on investment in the current climate, without the threat of falling into negative equity a year down the line.  There have already been signs that some people are seeing this as a serious option; to buy abroad and to rent in the UK. For property buyers, trying to get a foot on the property ladder, and turning tradition on its head, this concept has, in the past, been dubbed the BARBie affect (Buy Abroad Rent in Britain).

However, the fear of the unknown overseas market is enough to put many first time buyers off, without the experience of buying a home in the UK, the prospect of buying overseas without understanding the culture, language or idiosyncrasies of the country is a daunting challenge.  This does not have to be the case, there is no doubt that being well-informed, means buyers are well-armed BUT drawing on the expertise of an overseas property agent or consultant, without a doubt, can help ease the process and advise buyers of the pitfalls upfront so that there are no unnecessary surprises.

On the upside, getting on the property ladder abroad can be a lot easier than in the UK, with prices starting at £40,000 for studio apartments in towns and cities, such as Istanbul, Turkey. This means some buyers can pay cash to own a property and dispense with the mortgage application altogether, enabling them to get on the property ladder.

So maybe another solution to becoming a First Time Buyer is to multi-task, become a First Time Overseas Buyer and renter at the same time.

Buying a Home Abroad -Top Tips

Consider the soft issues there are a lot of “soft” issues to address, like the in-country culture and communication. When investing in Poland, for example, it is surprising how different service standards are between Polish and UK banks. Some suffer from bureaucratic processes; others are more modern and internet-based.  So if buyers are looking to invest in a buy to let, they will need to think carefully about the type of mortgage they get.

Raising property finance overseas

Getting secured lending at decent rates in the UK is currently a challenge, as banks use tighter underwriting criteria. It is important to be aware though, that property buyers abroad are likely to be asked to provide more credit information e.g. credit reference reports, which would normally be done automatically by UK banks and the loan-to-value on offer is usually lower for foreign national buyers than for sovereign nationals. In Spain for example (apart from some of the 100% finance deals), a foreign national would tend to get up to 70% loan-to-value for the property they are buying, but a Spanish citizen could get a bigger loan as a proportion of the value of the property purchased.

Buying homes abroad – legalities

A significant difference between UK purchasing process and many in Europe is the need to go before a notary, (a specially licensed lawyer) to sign the preliminary and final agreement, whereas UK exchange and completion can occur without the buyer having to be present.

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Property Venture® is an award-winning, UK-based agency for overseas property who helps people buy investment property and holiday homes in Europe, more easily and safely than they can on their own, because we offer grounded common-sense advice.

The focus is mainly greater Europe: Poland property, UK investments, Spain property, Turkey property, Cyprus property

On the Advisory Board and a Member of the Association of International Property Professionals (AIPP) the business has been vetted, approved and voluntarily commits to Industry Regulation and the Professional Code of Conduct. We are known for our quality customer service and non-pressurised approach to sales. Take a look at what our clients say

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