Overseas property sector – should there be doom and gloom?

Overseas property sector – should there be doom and gloom?



Since Brexit, there have many different comments in the press about how people feel the market and economy will develop during the next few months and most, unfortunately, have been rather dour.

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From my experience of the overseas property and mortgage sector, although some clients have put their plans temporarily on hold, there have been very few outright cancellations. 

As I have stated in previous comments, once the Brexit vote was known, there should not be any knee-jerk reactions. It will take time for markets to return to normality and further key decisions to be made – such as interest rate setting, Theresa May settling in as PM, exercising Article 50, new trade deals to be sorted. However, there are still opportunities to be sought.

In the most popular countries I deal with (France, Spain, Portugal and the USA), there are clients who are still purchasing, but with the following observations.

Interest rates continue to remain the lowest they have been for many years, with many now choosing to also consider fixed rates with terms longer than five years, whereas pre-Brexit variable interest rates or two- or three-year fixed rates were the norm.

Although prices may have increased for a sterling buyer by 10% for those purchasing in the eurozone or in US dollars, previous cash purchasers or those with a higher deposit are now approaching me with a more specific mortgage request to cover any shortfall due to the currency exchange changes or shortfall. 

For those UK-based clients purchasing to rent out the overseas property (and not requiring a mortgage on the new asset), they could possibly benefit from the higher rent to be received when their euro or dollar rental payments received are converted back to sterling.

With the speed of the political changes in the UK and the subsequent impact on the money markets, it is therefore definitely worthwhile in the next few months to keep watch on the overseas property industry and the different mortgage options that could be available.

Attributed to Simon Conn, overseas property and finance specialist 



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