Warning over ‘forgotten cost’ of buying property abroad
Investment firm Hargreaves Lansdown said that while many Brits successfully purchased homes abroad, there are still risks involved.
It said a key consideration which is often forgotten is the effect exchange rate movements can have on the overall cost of a property.
Spain, France and Italy are three of the most popular locations for foreign homes and it said the exchange rate between the euro and the pound has been ‘volatile’ in recent years.
This has generated mixed results for people buying property in those three nations.
A home in Spain worth €200,000 in 2007 has lost almost a third of its value due to currency and economic factors. Today that property would be available for £100,492, compared to £146,854 seven years ago.
A similarly priced property in Spain would have fallen to £135,420 while France grew moderately to £152,422.
Outside of Europe, the cost of buying a property in Australia has almost doubled since 2006 in sterling terms, it warned.
“Many of us dream of owning our very own ‘place in the sun’,” the firm said.
“The lure of warmer climates or delicious cuisines can indeed make purchasing a property abroad an attractive prospect. However, as one would imagine, there are a number of charges and fees involved in buying your dream home overseas.”