Overseas property. Advice desperately needed.

dwsjarcmcd

GDB2222 wrote: »

Well, we know the purchase price. What we don't know is what it's worth and where the price is headed, ie up or down? If, purely hypothetically, it was only ever worth say €50k, it may be better to cut and run. I have no idea whether that is the case, but it seems totally daft not to at least consider that possibility. You've only got to look at some new-build properties in the UK to see that sort of thing in action.

No your right we don't know, and if she tries to sell now she will almost certainly need to under cut the other properties on the development. If she doesn't need to sell I personally don't think she should guarentee a loss of that magnitude.

But as you say, I have no idea what the market in Italy is like, or that region. Suspect it is not nearly as oversupplied as the UK or Spanish new build markets.

dwsjarcmcd

Another option available to you if you have sufficient equity is to raise the money against your UK house. There are several points to consider (which I am considering myself)
Pro- You mitigate any future currency risk fluctuations
The mortgage is easier to manage i.e. overpayments etc.

Con - Dependent on the exchange rate at the time, you may 'lock in losses' if the rate subsequently improves. This is partially offset because you deposithas been paid at a higher rate.

Certainly worth considering.

simpywimpy

Are mortgages in Europe as widely available as they used to be? Or are there the same difficulties as here with funds just not available?

dwsjarcmcd

simpywimpy wrote: »

Are mortgages in Europe as widely available as they used to be? Or are there the same difficulties as here with funds just not available?

I think it is the same all over, however, as here with a good deposit (which we know MissS has paid) and a good credit history (which we don't therefore an assumption) there shouldn't be an issue.

GDB2222

dwsjarcmcd wrote: »

No your right we don't know, and if she tries to sell now she will almost certainly need to under cut the other properties on the development. If she doesn't need to sell I personally don't think she should guarentee a loss of that magnitude.

But as you say, I have no idea what the market in Italy is like, or that region. Suspect it is not nearly as oversupplied as the UK or Spanish new build markets.

I totally agree with your suspicion that Italy is probably not as oversupplied, although I don't know for sure. I suspect that all the touristy areas where tourists have bid up prices are going to suffer particularly badly, as the supply of buyers dries up in the recession. Nobody needs to buy one of these properties.

Almost across the World, the over-easy supply of loans has led to severe house price inflation, which is likely to be corrected. Some countries have not had inflation to the same extent, eg Germany. I don't know about Italy, but the countries with the most HPI in the past are likely to have the largest corrections.

Obviously, it's a big step to crystallise a £30k loss. It's also a big step to take on a substantial loan for a property that the OP does not really need and that could fall further. She really needs to investigate the local market rather thoroughly.

simpywimpy

That "need" is what is stopping me at the minute. I don't actually "need" to purchase just yet so rather than taking the risk, it might be better for me to hang on and wait it out

michellecyprus

Hi Miss Sunshine

I would be loathed to lose the deposit you have already paid. The prices in Italy have been hit by the recession and the key is other posters have pointed out is what is the property actually worth.

A good source of information on prices would be www.sellabroad.com, as well as agencies, private individuals advertise there properties on there (my place in Cyprus is on there). You could try and advertise it on there but only worth doing if you are prepared to let it go cheapish as there is so much competition and not many buyers.

My first port of call would be to go back to the developer and see if they will extend the payment dates.

Goood luck.

Regards

Michelle x

Smart_FX

HI Miss Sunshine,

you aren't the first one nor the last one who ended up in such situation.

We at Smart have lots of clients who can't afford to complete on their property due to Sterling weakening.

A lot of people contact agents to use the option of 3rd party buying property instead.

A lot of people get EURO mortgages and some of them decide to pull out and lose deposit and transfer remaining money back to Pound £. Some of those actually lost less than deposit value as Euro strenghten so they earned a bit on the rest of money which were refunded to them.


Advice to other property buyers.

There are specialists currency firms out there who should be able to help you from beginning of the buying process.

We can fix good rates up to one year.


Let me know if you need further assistance.

I can put you in touch with some agents in Italy and in the UK who may be able to sell your property.

hearts

What %age of the property woiuld you offer for the other 17k?

sheslookinhot

michellecyprus wrote: »

Hi Miss Sunshine

I would be loathed to lose the deposit you have already paid. The prices in Italy have been hit by the recession and the key is other posters have pointed out is what is the property actually worth.

I wonder if this really is the key. Does it matter what the value is just now.

If the property was bought with the long term in mind the value is likely to gradually increase again in the future, at what rate no one knows.

For the sake of 17k it is definitely worth proceeding with the purchase rather than losing 30k.