Buying property in the EU: Yay or Nay?

the_toby_way

Hello, so I'm lucky enough to have some money could be invested in property.

I'm highly considering buying a property in the EU for many reasons, price, holiday home etc. But what are the things I should be worrying about with brexit looming?

sal_III

I don't think that many if any EU countries have barriers to non-EU property owners, if they do, said barriers are known today, check them and prepare for worst case scenario - "no-deal" Brexit. Any other outcome will be more beneficial. Or buy a property in a EU country that doesn't have barriers to non-EU property owners to begin with if you are not set on a specific country.

DCFC79

Would you rent it out when your not using it ?


A couple more questions, which may or may not help to decide where you buy is the ease of getting there eg do you want a 6/7 hour flight or would you prefer a location where you could drive to ?
Would you want sun when staying there ?


There are most likely ex pat forums for the various countries in the EU, you could find more advice there.

need_an_answer

I love the idea of a holiday home but what happens to it for the other 48 weeks of the year...whilst it still has bills to pay and maintenance to be done?

Thrugelmir

Is this to be an investment or a holiday home?

steampowered

Exchange rate movements are the main thing to be concerned about.

Each £ was worth about €1.4 at the start of 2016 (a few months before the EU Referendum). It is now worth only about €1.11.

That's a drop of 29%.

So if you had invested in a € denominated asset such as European property before the referendum, you would have lost about 30% of its value in just 3 years, if you look at it in £ terms.

The £ could easily fall much further given the current political situation. Or, the £ could recover. Or, it could stay the same. Nobody knows.

There are lots of practical things to be aware of with foreign property generally - property taxes; language barriers; not understanding local laws; not understanding local conveyancing and so on.

Personally I would not invest in a holiday home. Why restrict where you can go on holiday? But that's just me.

theartfullodger

Well, the UK is in the EU, consider there:. Currently with currency slump better comparative value, depending one's long term view.

pjcox2005

steampowered wrote: »

Exchange rate movements are the main thing to be concerned about.

Each £ was worth about €1.4 at the start of 2016 (a few months before the EU Referendum). It is now worth only about €1.11.

That's a drop of 29%.

So if you had invested in a € denominated asset such as European property before the referendum, you would have lost about 30% of its value in just 3 years, if you look at it in £ terms.

The £ could easily fall much further given the current political situation. Or, the £ could recover. Or, it could stay the same. Nobody knows.

There are lots of practical things to be aware of with foreign property generally - property taxes; language barriers; not understanding local laws; not understanding local conveyancing and so on.

Personally I would not invest in a holiday home. Why restrict where you can go on holiday? But that's just me.

Isn't that the wrong way round?


If you bought something for €400,000 at 1.4 euros to the £, then £ amount is £285,714.


Whereas now if you sold it for €400,000 and transfereed it back at 1.11 then it would be £360,360. So it's gone up 25% in value rather than dropping? Although you obviously get less value for money now if buying which may have been your point as it's more expensive for us.


So those who held euro assets/currency are better off now if they converted back. It's why the UK is quite attractive to Non-UK investors as it's cheaper to acquire despite the chaos here.

AdrianC

Any particular one of the 27 other EU countries you were thinking of...?

Everybody's assuming euro exchange rates, but there's 8 other EU currencies as well as the Euro and GBP...

steampowered

pjcox2005 wrote: »

Isn't that the wrong way round?

Sorry, yes you are correct.

Yes you get about 30% less € property for your £ money now than you would have got in 2016.

Of course exchange rates could easily move again in a way which means the Op loses 30% or more of their investment - or they could go the other way, just a risk for the Op to be aware of.

melanzana

Don't want to rain on your parade or sound in anyway envious, but if you are looking for friendly advice, mine would be to research, research, research first, then RENT in the area of choice for a while to get a feel for it. Check out all the costs, thoroughly and ongoing costs too.

No scratch that, rent long term.

If you are thinking of places like France/Spain/Italy the buying costs are quite high especially on a used property, then you have property tax (+ residence tax in France) and you have to insure, maintain, pay the utilities etc. when you are not there.

Renting the property out on a holiday let basis can lead to dodgy dealing. A friend of mine was scammed by the agent, he let his friends crash in her apartment on the pretense that there were no bookings. A camera was installed at her next visit, and suffice to say the police got involved. I know that is not the norm, but you are at the mercy of these people if you are not on the ground. She sold up a year later at a small loss, but doesn't regret selling one bit.

Renting long or short term would be my advice. No responsibilities apart from paying the bills!

But you say you want to invest the money you have. I would not buy a property abroad for love nor money. Did that ten years ago, and got rid of it. That was in Nice, a lovely place, but the costs/charges were just ridiculous for the amount of time we spent there. Best decision ever. We have a good rapport with the agent that sold the tiny apartment for us, so we get a reasonable deal for a rental off season now. It is far more relaxing!

Maybe speak to a Financial Adviser?

Best of luck, hope I haven't put you off too much if it is your dream. But being practical and sensible is also part of the package!