Buying Property Abroad FAQs & Expert Guidance.

In France, expect to add approximately 10% to 12% of the purchase price. In Spain, expect to add approximately 12% to 16%. These costs cover government taxes and legal costs. We strongly advise checking with an independent lawyer in each country for a full breakdown, and note that arranging a mortgage on the property can increase some of these costs.

Costs vary from country to country, so check with your local independent lawyer. As an example, in France allow 10% to 12% of the purchase price to cover government taxes and legal costs, while in Spain this can be higher, at 12% to 16%. These costs can be higher again when arranging a mortgage, because there are additional taxes and legal costs involved in allowing a lender to take the property as security.

No. An applicant will not be able to secure a loan if they have any past adverse credit history, regardless of the circumstances. If you are unsure of your credit history, it is worth obtaining your personal credit report from an agency such as Experian or Equifax before you enquire.

Not in terms of the finance. Brexit has not changed the general lending position, as our lending sources still have potential lenders who may consider a UK applicant.

However, Brexit could possibly affect how long you are able to spend in the property, not whether you can borrow against it.

So the first thing to clarify is the purpose of the purchase.

If you are buying for short stays, a holiday let or as an investment, and you do not intend to stay beyond the period your visa allows, Brexit should not affect the purchase. Check this with the relevant lawyer.

If you are buying to live there, or to spend long periods there, check the local visa requirements for that country before you commit to anything.

Visa rules depend on the country and on your overall personal financial circumstances and profile, so you need to make the relevant checks yourself or with an immigration specialist.

Our lending sources organise the finance. They do not advise on local visas or residency status requirements.

Start with an independent lawyer and surveyor to confirm ownership of the land and the legalities of building there. The land then needs to be purchased and registered in your name, and banks do not normally lend against a land purchase on its own, so you will need the resources to cover that stage yourself.

You then need full planning permission and building or habitation licences granted, and must cover the cost of those approvals from your own resources. Lenders prefer works to be carried out by a local builder. The percentage of build cost a lender will eventually cover depends on the overall expense of the project, the value after completion, and your total personal financial position, taking into account both new and existing personal debt.

Normally, a lender will require you to purchase the land from your own resources, and to obtain all relevant planning permissions and building or habitation licences, before they will consider assisting with construction costs. Some lenders will offer up to 100% of construction costs, while others will consider a percentage of the final valuation once the property is built. Lenders also prefer a locally registered architect or builder to be involved, rather than overseas companies.

In most instances, no. Rental income cannot be used as part of the mortgage calculation. Lenders will only consider earned income, pension income and in some cases investment-type income. If you intend to rent the property out, also check the local rules for that country, what is permitted, and whether any local licences are required.

Allow at least 6 to 10 weeks to complete on a property in France, and longer if you are applying for a mortgage. There are conditions and cooling-off periods when you sign a sales contract, and additional cooling-off periods if you are applying for a mortgage. Combined with the legal process, these can push you past your completion date.

If you are applying for a mortgage, the process can be delayed further while the lender waits for supporting documentation, valuation reports and a subsequent mortgage offer. Timescales in other countries vary, so check with your independent lawyer about any complications they foresee before you sign a sales contract. Do your homework first.

Not without verification. In many cases it has eventually come to light that a translation is not a true version of the original, containing errors, omissions or additions. One simple check is whether the translation has the same number of paragraphs as the original. If it does not, there is almost certainly a problem. The safest option is to have your independent lawyer or a professional translator confirm the translation is a true version of the original.

This depends on the conditions set when you sign the sales contract. In some countries you must either pay set amounts at set times, or complete within a defined period. In France, once you sign a sales contract and confirm the completion date, you could lose your deposit if you fail to meet that date.

Some conditions are unreasonable and do not account for delays beyond your control. We would also advise that your independent lawyer obtains financial references on the developer, to confirm they have the cash resources to complete construction and to establish what compensation you would be entitled to if they miss the agreed timescales.

Developers or agents may set dates for a small holding deposit or a larger stage payment at the point you sign the sales contract, often without a cooling-off period or with a very short one such as seven days. Before parting with any cash, ask your independent lawyer to check the contract, and in particular the clauses that apply if you decide to withdraw. Ask for a cooling-off period of at least 14 days, and 30 would be better.

Property prices can be higher because supply is limited, and it can be more difficult for foreign nationals to buy, as restrictions may apply, for example in the Caribbean. Lending rules can also be more restrictive. On the mainland you may achieve a higher loan-to-value, and growth may be stronger than on an island. Planning laws may also be tighter because there is less land available, so do not assume you will be allowed to extend the property.

Take independent advice from an English-speaking lawyer who is not connected to your seller, estate agent or developer. Some overseas properties have been built on land that should have been set aside as green belt or agricultural land. In Spain, for example, environmental authorities have demolished homes built too close to the shoreline or on unregistered rural land.

Your independent lawyer should request paperwork confirming that all parts of the property have been built under the correct legislation. That includes extensions, garages, swimming pools and outbuildings, and confirmation that plans comply with restrictions on height, floor space and distance from boundaries.

Treat this as seriously as missing planning permission. It can affect which utilities you can access, because local councils may not grant permission for gas, electricity and water unless the correct licences are in place.

Do not sign anything without taking independent professional advice first, and make that clear before you travel. This pressure often occurs on inspection flights, where you are managed by the developer or agent within a tightly controlled timetable of property visits. Try to obtain references from previous clients to establish their customer service record, and check whether there are any restrictions on your movement during the trip.

Normally, no. Banks do not lend against a land purchase on its own, so you would need to buy the land from your own resources and register it in your name. Once that is done, and the relevant planning permissions and building licences are in place, a lender may then consider construction or development finance towards the cost of the build.

Normally a lender will require you to purchase the land from your own resources and register it in your name, then obtain all the relevant planning permissions and building or habitation licences, before they will consider construction or development finance towards the cost of constructing the property.

We will be looking for at least the last three years of trading accounts, ideally audited by an international firm of accountants. The business should have been trading for at least five years, with at least three years of profitable accounts. You are defined as self-employed if you hold more than a 20% to 25% shareholding. Lenders base their calculations on your net personal income after tax, and if dividends are drawn they must be seen to be paid on a regular annual basis. All information should be provided in English.

A lender will want to establish:

• Whether there is a probationary period with the new job
• Whether you are continuing your career in the same type of business or occupation
• Whether the new job is permanent, or on a temporary or rolling contract
• Whether you will continue with any existing loans or mortgages in the UK

Not without checking. Completed new properties can bear little resemblance to the property originally signed up for. Your independent lawyer can check that the specifications set out in the original sales contract match those of the completed property.

An international mortgage is a loan secured against a property outside the jurisdiction or country where you currently reside. It is normally arranged by a local bank in the same area as the property, although for larger loans a bank outside that country may also be interested in lending. The final loan amount normally depends on the applicant’s overall personal financial profile and the property valuation.

In many countries, yes. It depends on where the property is located, your overall personal financial profile, the property valuation, and whether there are lenders in that jurisdiction offering mortgages to applicants who are not currently based there. Local laws must also allow a foreign national to own property in that country. A specialist overseas mortgage broker with a panel of lending sources in that country can confirm what is available and investigate whether they can assist based on your circumstances.

The most common reasons are:

• Gross salary too low, as some lenders set a minimum income requirement
• Gross salary after tax too low to cover both existing and new debt
• If self-employed, net personal income too low averaged over the last three years
• Turnover fluctuating too much between profit and loss
• Turnover and profit decreasing each year, with no projected upturn
• Personal expenses too high as a percentage of earnings
• Past bad credit, such as defaults and County Court Judgments
• In some countries, rental income on the existing or new property not being counted towards affordability

In no particular order:

• Insufficient deposit. Check the maximum loan-to-value with the lending source
• Not allowing for additional setup costs, such as government taxes and legal costs
• Down valuation of the property
• Legal or planning issues concerning the property
• Gross salary too low, where a lender sets a minimum income requirement
• Gross salary after tax too low to cover existing and new debt
• Personal expenses too high as a percentage of earnings
• If self-employed, net personal income too low over a three-year average
• Turnover fluctuating between profit and loss, or declining year on year
• Past bad credit, such as defaults and County Court Judgments

All applications are subject to the client’s personal financial status and the valuation of the property, and affordability is assessed case by case against your overall existing earned income and liabilities. Note that while lenders do not generally restrict renting a property out, you should check locally with your lawyer whether any licences or permissions are required. Any rental income received will not be taken into account in the mortgage calculation.

Yes. It is worth adding the words “subject to an acceptable mortgage offer”, or similar wording, to any sales contract you sign. This wording should be added before any deposit is paid, to help ensure the deposit is refunded if a mortgage is not forthcoming. That could be due to a legal problem with the property or a down valuation, as well as personal financial reasons. Check with your independent lawyer regarding the most appropriate wording for the country where you are purchasing.

Yes. We have had lending sources in Greece for the past couple of years. Lending is normally available up to a maximum of 65% of the property value, with a minimum loan of €100,000 and a minimum purchase price of around €150,000.

Prices are steadily increasing and the economy is improving. There are still opportunities coming from repossessions left over from the economic problems that followed the 2007 to 2008 crash, and rental returns can be strong in popular areas such as Rhodes, Corfu and Crete. We are also seeing buyers who might previously have looked at the Middle East consider Greece and southern Cyprus instead.

French lenders will require sufficient earned or pension income to evaluate how much you can borrow. They will not take rental income into account, because it is not guaranteed, but they will take existing liabilities such as your UK mortgage repayments into account. On a case-by-case basis investment income can be considered, depending on the amount invested, where it is invested and the yield obtained. If you later gain employment in France, most lenders prefer you to have been employed for at least 12 consecutive months with no probationary period remaining.

It depends on the value of your pension, your overall personal financial profile, the value of the property, and whether local laws allow a foreign national to own property in that country.

Take advice from an independent lawyer, an architect, or both. Properties are occasionally protected due to their age, location, design or construction, which can restrict what you are permitted to do with them.

It depends on where the property is located, your overall personal financial profile, the value of the property, and whether local laws allow a foreign national to own property in that country. There would also need to be sufficient equity available.

Check how long they have been in business and confirm they hold all the correct licences. Ask for details of past developments so you can assess their track record.

Treat it with caution and do some digging into the developer’s track record. Check whether they have provided similar facilities on other developments, and speak to current and past owners. It may be useful to build a penalty or compensation clause into your contract.

Yes, which is why your independent lawyer should conduct a search on the property. This will confirm the property has a title deed and that the vendor is legally entitled to sell it.

Never sign up for a property you have not visited. When you do visit, go during the day and at night, and if possible in different seasons. Talk to existing residents in the area.

If you are arranging a mortgage, the bank will carry out its own survey. However, it can still be beneficial to arrange a separate valuation covering more in-depth detail, such as title searches and checks on boundaries, drainage and utilities.

Yes. You need to check the property has been constructed properly and has all the correct licences. An independent valuation will reveal problems such as poor soil foundations or substandard materials.

Instruct an independent surveyor, ideally one that is not locally based, to check the valuation against appropriate comparable properties in the area.

Obtain an independent valuation, check the developer’s past building record, and look into comparable properties in the area.