Buying overseas property in South Africa

jkbosch10

We are based in the UK and own property over here.

We would like to buy property in SA and would like to know if we would be able to get a UK mortgage for the SA property.

Can anyone help?

C_Mababejive

I thought most people wanted to get out of SA?

Ian_W

A UK mortgage has to be secured against a UK property AFAIK. How could a lender here repo a property there, subject to different laws, if you failed to keep up the repayments?

If you have sufficient equity in your UK home a lender may allow you to remortgage it for a higher amount to raise capital to purchase an overseas property - but it will depend on the loan to valuation ratio when the amount you want to raise is added to your outstanding balance.

The other alternative is to get a mortgage in the country you're buying in secured against the property there. Do note that there is a currency risk that your mortgage may become more (or less!) expensive if the exchange rate alters. My somewhat dated experience, not in SA, suggests there are generally more fees and expenses with an overseas mortgage.
THIS COMPANY is a leading broker in overseas mortgages, please note this is not a recommendation. I have not personally used them as I found them to be too expensive but their website has plenty of info for research.

If you intend to subsidize your purchase by holiday letting when you're not there, research the market very carefully. Some countries have strict laws on letting, some have over-supply - so it's not always quite as easy or straightforward as A Place in the Sun would have you believe!

sharkie

I had a property there.

Firstly land was and probably still is plentiful and cheap, though the sought-after areas are ..... sought-after

If something goes wrong, it is a long way to travel.

I lost count of how many LA's I had, non of them were any good, nor did they care. At one point I even had squatters and the LA wanted me to pay them as the LA were out of pocket as they could not rent it.

Had people staying in the property and the LA was being paid, but I was told it was still empty.

My parents whom lived 50 miles away had to go there every week to sort out something or other.

I lost money when I sold the property, but I was so glad to get rid of it.

This was around 25 years ago and things have now become worse. You also have to factor in private security too, and if they are bent, then all their friends come in - had that as well.

I lived there for 12 years and the only positive comment I can make that the weather is great and there are some stunning areas, but jkbosch does sound like an Afrikaanse name?

D_Kerns

Hi Ian W,


You are right to point out the benefits of using an overseas mortgage broker.

If you’re getting a mortgage in South Africa, you might also want to consider setting up a payment plan with a foreign exchange broker. For example. With a Regular Payment Plan, a Forex broker direct debits your account and credits your beneficiary account with the South African Rand equivalent every month. Most brokers offer you the option of either fixing the exchange rate or going on a variable plan whereby the rate you get changes every month depending on the rate at the time of the transfer. It’s also a good idea to invest when the Rand is weak against the pound to gain maximum advantage from this. Fees for this service range from £4 to £15 depending on the currency broker. We currently charge £4 per month for the plan.

Also certain brokers have partnerships with banks in South Africa which means you can set up your account from the UK.

Having a look at their website will show you what the charges are and other options if you are looking to save such as fixed term deposits. With UK Banks looking to slash interest rates on savings even more in the next few weeks, it’s worth investing the money in countries abroad that offer higher interest rates.
You can also sign up to daily and weekly currency updates through some foreign exchange brokers. Please let me know if you need any further information.

Regards,

David Kerns, Dealer, Moneycorp