Things to look out for when buying property overseas

Buying property overseas is usually more complicated than buying locally. You’ll need to consider a number of risks and might need to work out how to get a mortgage for a property abroad. 

Know the risks when buying property abroad
  • Tax – make sure you account for all the tax you’ll be liable to pay, both in the UK and in the country where you have the property.
  • Check the paperwork – make sure that you have all the necessary permissions, licences and planning consents before you sign any form of contract or agreement.
  • Exchange rate changes – even a small change to the exchange rate could drastically affect the value of your purchase. This could make a property – or your mortgage repayments, unaffordable overnight.
  • Beware developers and the hard sell – don’t succumb to heavy pressure to sign up with a deposit before you’ve had a chance to think carefully and get independent advice.
Getting a mortgage for a property abroad

If you have a mortgage where you’re making repayments in a foreign currency, the lender must tell you if the exchange rate fluctuates by more than 20%.

These rate fluctuations could affect your ability to meet your future mortgage commitments.

To protect borrowers, lenders must offer you the option to repay the mortgage in another currency.

Get independent legal and financial advice

“We strongly recommend that prospective purchasers of overseas property seek independent legal and financial advice at all stages of their purchase.”

Source: The Foreign and Commonwealth Office

Always seek legal advice from a lawyer who is independent of everyone else involved in the deal including:

  • The seller
  • Developer, and
  • The estate agent

Ensure your lawyer is fluent in both English and the local language, and that they understand property law in the country where you’re buying plus how it relates to non-residents.

Should you be appointing a UK legal firm, check that they’re registered with the Law Society in the UK and specialise in international transactions and property conveyancing.

If you’re appointing an adviser in the country where you’re buying the property, you should be able to find lists of English-speaking professionals on the website of your local British Embassy.

Check the British Embassy website for lists of local English-speaking lawyers and qualified translators

If things go wrong when buying abroad

An overseas property purchase is not regulated by the Financial Conduct Authority (FCA). So, you’ll not be protected by the Financial Ombudsman Service or Financial Services Compensation Scheme if things go wrong. Even if you use as FCA-registered financial adviser or mortgage broker in the UK to make the deal on your behalf.

LEGAL STUFF

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

Massey Divall Financial Services are an appointed representative of The Right Mortgage Limited which is authorised and regulated by the Financial Conduct Authority.

The Financial Conduct Authority does not regulate most buy to let mortgages.

The guidance and /or advice contained within this website is subject to UK regulatory regime and is therefore targeted at consumers based in the UK

Conveyancing isn’t regulated by the Financial Conduct Authority.

Local Mortgage Advice for Croydon

Fees Free

We do not charge a fee for mortgage advice. We offer customers fee free mortgage advice. Our expert mortgage advisers will help you get a market leading mortgage deal. We help you throughout the entire mortgage process. There are no hidden costs or surprises. Try our fee free advice for your mortgage.

GIVE US A Call

020 3174 0099
help@mdfs.co.uk
 

Copyright – Massey Divall 2020

Call Now