Overseas mortgage markets shrivelled after the global downturn, while borrowing requirements suddenly got a lot more complicated. Here Faith Glasgow provides an invaluable guide to typical scenarios in our most popular markets
So how much can you borrow?
A
fter four years of banking crises, international property market collapses, economic gloom, pay freezes and job
losses, perhaps it’s surprising that many Brits still cling to their dreams of a bolthole in the sun. Or perhaps it’s not. In some respects,
the troubles of these recent years have opened up unexpected opportunities for buyers with patience and confi dence, as property prices across Europe and the US have collapsed. The Spanish market is down by
nearly 25 per cent since the 2007 peak (according to Nationwide), while the US market has lost around 35 per cent since 2006 (Case-Shiller home price index). It is cash buyers who have been
best placed for such bargain-hunting, as the mortgage market in many countries shrivelled in the wake of the fi nancial crisis. In their efforts to limit their risks, many of the international banks catering for overseas property buyers pulled out, while domestic
banks stopped lending to non- residents or introduced far more stringent terms. “Before the crisis, you could rely
on the banks offering mortgages according to clear-cut criteria,” explains Miranda John, director at Savills Private Finance. “Now, there are much bigger grey areas affecting their decisions, including the type of property, its location, the nature of your employment. That’s probably the single biggest difference in the current market, compared with a few years ago.” But the lending environment varies
markedly from one country to the next. So it’s crucial that if you’re thinking of taking advantage of current low prices and the strengthening pound (now worth more in euro terms than four years ago), you do your homework beforehand. Here’s a round-up of the mortgage scene for overseas buyers in the UK’s favourite holiday- home destinations.
“Before the crisis, you could rely on banks offering mortgages according to clear-cut criteria. Now there are much bigger grey areas affecting their decisions”
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MORTGAGES
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