Language barrier to overseas investment

Article Date : 27 July 2005

While nearly three quarters of people aspire to owning a second home abroad, red tape and language problems put off many. Over two in five people polled by QRS for the Norwich Union holiday home survey said being able to communicate easily as a very important factor in selecting a second home. Almost four in 10 said they would be most put off buying a second home by the red tape, the complexity of tax and planning laws, and the time involved in purchasing a property. So while Spain remained the first choice of most, ‘English speaking United States and the UK come a close second and third for most appealing places to buy’. Price was also a factor – investors said they would pay, on average, up to £130,000 for a second home. So although a quarter of those polled said they would like to own a second home in the UK, two thirds said high property prices were stopping them buying here. Over two-thirds (70 per cent) said the biggest plus for having a holiday home would be the ability to share it with family and friends, followed by the benefits of holidaying in a familiar place (67 per cent). For three in five said the main advantage would be the chance to escape the British weather. ‘More and more people are being tempted to invest in a place in the sun, thanks to the availability of cheap flights and television shows featuring inspirational stories about people buying their dream holiday home’, commented Steve Minns, product development manger at Norwich Union, which claims to be the only major insurer to cover second homes as part of an existing home insurance policy. ‘However, as with any home, there are still the issues of maintenance, repairs and making sure it’s safe and secure - especially if the property sits empty for some of the year. And these factors can be easily overlooked in the excitement of finding the right property in a great location’. Norwich Union has compiled a top tip list to help potential buyers avoid some of the more common pitfalls when buying a property abroad: 1. Do your homework - don’t act on a holiday whim. Speak to people who currently live in the area, visit out of season and investigate the travel options of getting to your chosen location. 2. Always use qualified professionals who are proficient in your chosen country’s laws and processes. Find a good solicitor and surveyor fluent in both English and the native tongue. 3. Research all legal issues and costs involved up front. Consider opening native bank account to ease payment transfers. Check out the tax laws of he country you are buying in, as there may be strict rules if you rent or sell the house. 4. Ensure you don’t inherit a debt on the property before you purchase - unlike in the UK, you could well be liable for the full amount. 5. If possible arrange your mortgage in the currency that you earn in or agree the exchange rate up front to avoid fluctuating rate changes. 6. Always allow yourself a cooling off period. Never sign a contract on the spot, especially one you don’t understand. It is estimated that 152,000 people own a second home in Great Britain and a further 147,000 have properties outside the country. Of those questioned who already had a place abroad, 15 per cent had properties Spain, 9 per cent in Portugal and 6 per cent in Cyprus and the United States. Article Source - residentiallandlord.co.uk

Language barrier to overseas investment

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