General: Owning a home abroad

The wine dark sea

For many people the Mediterranean acts as a magnet, drawing them back time after time, year after year. Whether as tourists or property owners, there’s something about what has been described as the wine dark sea that gets under their skin and simply won’t let go.

Med magic

Stretching from Portugal in the west through Spain, France, Italy, Croatia, Greece and down into Turkey, the north coast of this virtually tideless body of water with its multitude of nationalities and languages bordering it, has drawn Britons for many decades. Today, parts of the North African coast are doing the same thing.

The novel idea of spending their annual holidays around the Mediterranean took hold with the British in the late 1950s and the first countries to benefit from these visitors were Spanish Costas, parts of the French Riviera and Portugal’s Algarve. A few other destinations such as Malta, Cyprus and Spain’s Balearic Islands also grew in popularity.

Gradually throughout the late 1960s this changed into a groundswell of people who asked: “If I can have a holiday abroad, why can’t I own a property in the sun?”

Global industry

They found out quickly that they could, and from tentative beginnings this led to an enormous global industry, reaching from Australia, New Zealand and the Philippines to Brazil, Mexico and Canada. And, of course, with the reunification of Germany and the fall of the Soviet Empire, property investors criss-crossed Europe and the newly-liberated countries looking for property bargains.

These buyers were from the next generation, following on from those early pioneers who just wanted a studio apartment to get some sun on the Costa del Sol. While there were plenty of people looking for a home abroad among the newly retired or young families wanting a starter apartment, many of the new band of investors included some who bought not one property, not three but 10 or 15 or 20 or even more, piggybacking the financing of each apartment or house on the back of the previous one.

And the banks rubbed their hands with glee and handed over ever-larger amounts of cash, all the time offering bigger and better terms. Or so it seemed. As we all know now, the game couldn’t last and the fallout during the last 12 months has been horrendous for many people.

Proceed with care

So what is the point of this trip down memory lane? Well, things will improve. The sun will continue to shine on beachside properties, snow will fall on ski chalets in the Alps or the Pyrenees and life will go on. But the trick, as in all things, is to learn from experience.

There are lessons to be learned. If you decide in the future to invest in a property outside the UK, please, please proceed with care. If you read an article in a newspaper advocating caution and suggesting you should not consider buying without first viewing the property, listen to the advice.

Don’t plunge in and buy a home without taking proper and independent legal and financial advice, don’t take risks, don’t over-extend yourself. Remember, in some countries, bricks and mortar can carry debts from one owner to the next. Spend time and don’t allow yourself to be rushed into making unwise decisions. Don’t be embarrassed about asking questions and if you don’t feel comfortable with the replies remember, there’ll always be another property.

This advice isn’t simply to help solicitors and financial advisors make large sums of money. They are there to protect your wallet and by taking independent advice you’ll know that your advisors are acting only for you and helping to ensure that you’ll end up with the home you want. You’ll also end up with full title to the property which should make your bank manager feel a little more secure - and once you’ve bought a home in a Mediterranean country, you’ll sleep better at night beside the wine dark sea.

Stewart Andersen

Stewart has worked on a variety of magazines for more than 20 years as a journalist and editor, usually specialising on property and travel, both in the UK and overseas. His first book ‘Wild Thyme in Ibiza’ was published recently and this year he launched Stewart Andersen’s Property & Travel Blog