Guide to buying property in Italy
With property prices expected to remain low in the short-term opportunities in the Italian property market are ripe for the taking.
The country offers breathtaking landscape, shimmering lakes, stunning architecture, and glorious food and wine, and many people who invest in property there say they’re buying into the sought-after Italian lifestyle. And with a good choice of flights from the UK, the ease and cost of travelling to Italy have never been better.
The property market, overall, is around 25% below 2008 without being overvalued, according to i-RES (Italian Real Estate Solutions) and prices are generally expected to remain low in the short term.
Italy has by no means escaped the effects of the global downturn which resulted in its longest economic recession in 60 years. The country, however, is considered as a relatively stable market when compared with other European countries. It was never heavily involved in the sub-prime lending market, nor has it suffered the effects of the over-development of property, like Spain.
Italian homeowners buy houses to live in rather than as an investment and, on average, move only once every 20 years. Prices, therefore, have remained relatively more realistic and have had less room to fall.
While purchases of property have halved since 2006, Italian property represents very good value and many overseas investors are making their move before they miss out on the best opportunities. And there’s plenty of room for some price negotiation with very motivated vendors.
Tuscany is still a favourite with British buyers and has been so popular in the past that the Chianti area has been nicknamed ‘Chiantishire’. Home to exquisite cities such as Florence, Lucca and Pisa, Tuscany boasts a stunning 170-mile coastline and a number of charming places to house hunt. Properties here do come with a higher price tag, however.
The Italian lakes are also popular, with most interest being concentrated around Lake Maggiore and Lake Como. Maggiore is less than an hour away from Milan, so very accessible. Lake Como, popular with the jet set, offers an excellent choice of properties, and although prices are relatively high, an oversupply of flats and smaller properties just inland means there are some good deals available.
Often referred to as ‘the green heart of Italy’, Umbria is centrally located and a lot less expensive due to it being less easily accessible. If you intend to let out your property, this area could be a very good choice as the rental market is strong.
Newer to overseas investors is Abruzzo, a stunning area to the east of Rome on the Adriatic Sea. It has only recently opened up to tourists via budget flights to Pescara, and as it’s still relatively undiscovered, prices are lower and it’s a more affordable option for British buyers.
Lending to foreign nationals has been restricted over recent years, but the Italian mortgage market is starting to open up again with new lenders coming on board. Purchases are still limited to higher value properties, however, with a minimum loan of €250,000. The maximum loan-to-value is 80%, loans are on a repayment basis and rates are currently start from around three per cent to 4%.
Clare Nessling is director of Conti, the overseas mortgage specialist