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EU Property Solutions- Experts in all Spanish property issues

EU Property Solutions offer professional assistance and advice in all areas of European property in particular, Spain. We can help provide strategies and solutions to solve problematic property issues, negotiate with lenders on debts, help reclaim lost deposits on unfinished developments and help with repossessions and mortgage arrears across Europe. We have offices in London, Belfast and Spain.

Is now a good time to buy abroad? If so, where?
16 November 2017

When it comes to both selling and buying a property abroad, timing is everything.

With market fluctuations occurring and things constantly changing, you need to make sure you’re snapping up a property at the optimum time in order to ensure a good return on investment and to avoid losing out on hefty sums of money. Brits are still seeking solace in European holiday homes, but is now a good time to buy and if so, where? Check out our blog on some of the best and worst places to look if you’re wanting to buy abroad.

Spain

After a decade of uncertainty, Spain is still the most popular choice for Brits buying a property abroad. The volume of sales has been increasing quarter on quarter and there is a lot of confidence being recovered in the market. Properties remain affordable and are a lot cheaper than some of the neighbouring countries that Brits are flocking to, so it’s a good choice if you don’t have loads of money to splash out with.

Bulgaria

If you are really looking to budget when it comes to buying a property abroad, Bulgaria is the best option for you. With its amazing scenery, beaches and mountains, it’s a great choice in terms of location and is also extremely affordable when it comes to the cost of living and of buying property. The average property price is £90,734, while utility bills will only set you back on average £70 a month. With interest increasing in the country, now may also be a good time to buy and sell as you may stand to make money.

France

France has always been another popular choice for Britons interested in buying a property abroad, with the French Riviera being a particular pull to the region.  The newly-appointed French President is committed to reducing taxes for property owners and simplifying the fiscal framework, all strong pulls for anyone about to invest in a home in France.

Generally, how are things looking when it comes to buying a property abroad?

While many markets are continuing to show signs of recovery, there is still a lot of uncertainty, especially given the fact that many of us don’t know what impact Brexit will have.



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What does the ‘weak pound’ mean for you and your property?
09 November 2017

What does the ‘weak pound’ mean for you and your property?

While the thought of owning a property in a sunny European country like Spain does sound extremely appealing, what doesn’t sound so great is the cost implications that go along with it.

If you pay any attention to currency rates you’ll probably have noticed that the cost of exchanging sterling for euros is seemingly higher as of late.

The pound has just entered an 11-month low at 1.11 euro and financial forecasters predict things could dip even further.

What does this mean for people who own property abroad?

Political uncertainty

One of the key factors contributing to the weak pound is of course Brexit. Ever since the UK voted to leave the European Union last June, the pound has been buying fewer euros.

This isn’t the only political element that is affecting the weakness of the pound, or, perhaps more accurately, the strength of the euro.

The French presidential election that took place earlier this year also produced a lot of political uncertainty, driving the euro lower.

However once, it became clear that Emmanuel Macron was likely to win, these concerns were forgotten, leaving the euro in a much stronger position.

Brexit has left us all feeling the pinch and facing financial uncertainty, especially for those who own property abroad as repaying mortgages could prove to be more difficult.

Strengthening euro

It’s important to understand that any event that takes place and makes the euro seem more attractive will have a direct, negative impact on the pound.

The euro has been boosted recently due to the market anticipation that the European Central Bank will start cutting back on its Quantitative Easing programme.

This has resulted in more euros in the Eurozone economy, which in turn has boosted performance. However, if the programme changes, pressure on the euro will lift which will change the game once again and could lead to the pound gaining back some of its lost ground.

Keeping interest rates low

In terms of investment, low-interest rates are usually seen as a negative as they deter foreign investors and make currency seem less attractive.

Many economic observers predicted that the Bank of England Monetary Policy Committee meeting last month would see action in favour of raising interest rates. This wasn’t the case, so a low-interest rate persists and the pound continues to decrease in value. Whether this changes as the political picture becomes clearer remains to be seen but, for the short term at least you’ll likely notice an increase in cost when buying or travelling overseas.

With interest rates across Europe rising, owning property could become more expensive.



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Repossession: everything you need to know
09 November 2017

The word repossession incites doom and a feeling of dread in all of us, particularly when we are talking about property that we own abroad.

You’ve spent time-saving and planning for your home purchase abroad, created amazing memories here with your family, only to be left in a situation where unfortunate events or poor finances have resulted in repossession.

So, what does repossession actually mean and what course of action should you take if you find yourself in a position where your holiday home is going to be repossessed?

What is repossession?

If you purchase a house using a mortgage, you will technically own the property but your mortgage lender will have a financial claim against it. If, for whatever reason, you are unable to make all of the payments your lender will attempt to get the money back from you, along with any other missed interest payments and fees. One of the ways that they may choose to do this will be through repossession of your property. The courts will have to decide that this is an appropriate course of action and will also decide whether bailiffs will be sent to evict you. Once a lender has taken control of your home, they will sell the property and recover all of the money that you owe, as well as additional costs that have built up.

Is the situation any different or worse with property abroad?

If you buy a property abroad and are subsequently required to borrow money abroad, lenders will be able to follow you home to the UK and take action against you through the UK courts.

What’s the worst case scenario?

Unfortunately, repossession can lead to bankruptcy in very bad circumstances. Foreign lenders have the right to follow you back home, which means moving back won’t always means you aren’t chased for outstanding payments.

What’s the best course of action?

There are a number of things you can do if you find yourself in a position where your home is going to be repossessed. Handing back the keys to the property and surrendering yourself is one course of action, but should only be taken in serious circumstances with proper advice and guidance to avoid bankruptcy.



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After the debt crisis and Brexit, is it too much trouble to lend to Brits who want to buy abroad?
03 November 2017

Brexit has further affected those looking to purchase a property outside of the UK.

Prior to the property bubble burst in 2007, Britons eager to snap up a home in the sun on the continent were given access to a huge range of mortgages. But over the last decade, the market has changed more than a little. Today, the debt crisis and the Brexit vote have made it more challenging to secure the finance you need to put your name on a stunning second home, whether it’s on the beautiful coast of Spain or in an authentic village in Greece.

The first factor to hit the lending market for Brits seeking to buy abroad was the debt crisis. In 2007, property prices were on the rise and developments were springing up across Europe in the most popular spots. But the financial crisis led to prices plummeting, planned construction work being halted, and left families unable to make their repayments. It meant that banks have become more cautious and risk-averse, making it more difficult to find a willing lender and in the wake of the crisis the number of Brits buying homes in Spain halved.

Uncertainty and the weakening pound means you’ll get less for your money, with prices rising by about 10% since the referendum. If you thought your budget would be stretched before Brexit, you’re going to face further pressure now and it could get worse when you consider currency fluctuations.

Coupled with the risk-averse attitude of the banks, the impact of Brexit is affecting Brits seeking to lend to buy abroad.

The good news is that there are still options for Brits looking to buy that dream holiday home and it can still be a worthwhile investment option if you pick out the right property. Whether you’re choosing to buy a property to turn into a family home or to rent out on the market, there are still lenders that are open to you.



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Own a house abroad? What is a property bubble?
03 November 2017

What is a property bubble and how could it affect you if you own a house abroad?

At present, the housing market across Europe is unstable and changeable. Prices in some European countries such as Ireland, Lithuania, and the Czech Republic are steadily rising, prompting fears that another property bubble could occur. You may have seen the phrase property bubble being splashed across different articles and headlines, but do you actually know what it means and how it may affect you if you own a house abroad?

Keep reading to find out exactly what a property bubble is and the implications of one setting in.

A property bubble is an increase in housing prices which is prompted by higher demand in the face of limited supply, which can take a long time to readjust and increase.

Speculators will enter the market in order to trade during a time of higher risk, hoping to capitalise on higher profit margins. This will further drive demand, which will at some point decrease as supplies simultaneously increase. This results in a sharp drop in prices, and the bubble bursts.

How will a property bubble affect you?

If you own property in a country within the EU that is in a property bubble, this could be interpreted as being a good thing. An increase in demand and prices may mean that, if you are looking to sell your property, you will be able to do so more easily and will benefit from a higher return.

However, it is important to remain vigilant regarding property bubbles, as once they burst prices will drop significantly, which could leave you in a situation where you receive less money than you hoped for your property. You may even be left in negative equity.

The Spanish property bubble

The property bubble in Spain burst in 2008, before which the country had been building more homes than the UK, Germany, and France combined.

Brits also forked out millions for holiday homes that were never built, but luckily many will be getting this money back as Spain’s Supreme Court opened the way for around 130,000 Britons to claim directly from banks.

If you have any questions about property bubbles or are concerned about selling your property abroad, get in touch with us and one of our friendly and highly-qualified staff will be happy to offer you assistance.



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What happens if you find yourself in a situation where your overseas property developer has gone bust?
03 November 2017

Often when you buy a property abroad, it will be a through a property developer, especially if you’re buying off plan.

If the market is unstable and values and demands are reducing, situations can arise where your property developer happens to go bust. We saw this in Spain a few years ago with many urbanizations left half finished. So, where does this leave you if your developer goes bankrupt or ceases trades while you’re in the middle of buying one of their properties?

What happens if you have completed your purchase on a property?

 If the sale has gone through, it is likely that the developer will have also sold other properties within the same complex. In this situation, the developer becomes your neighbor and is subsequently responsible for his fair share of the community fees.

However, because many developers now operate under the Administrative Receivership, it will be necessary for you to deal directly with the office of the Administrative Receiver and not with the developer themselves.

It may, therefore, be necessary to call a meeting with other members of the development community in order to protect your position regarding unpaid community fees. Once an agreement has been reached, the community will be able to enforce the unpaid fees as a debt against any incoming purchaser and then collect the unpaid balance.

What if you haven’t completed your purchase on a property?

If you haven’t completed your purchase but have perhaps paid your deposit or signed your Private Purchase Contract (PPC), it is likely that you will be in a situation where you will be purchasing the property outright once completion has been met. Legally speaking, there are two different types of creditors; secured and unsecured. The former will have registered charges against the development company’s assets by way of mortgages or other loans, whereas the latter will not.

Unfortunately, until a property is completed, a prospective purchaser who hs paid a deposit but not the amount of the property in full will be classified as an ‘unsecured’ creditor. This means that your rights to recoup the cash that you deposited with the development will come second to funds owed to ‘secured’ creditors.



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Could I lose my home in the UK because of Negative Equity Abroad?
20 October 2017

Could I lose my home because of negative equity abroad?

Negative equity can often be confusing to deal with, but especially if it concerns a house abroad. Often, expats will be told by their lenders that they are in negative equity when they try to sell; that the current market value of their home is less than what they paid for it, meaning that selling at the current market value will leave them with less money and often means they cannot afford to pay the full amount that was originally lent to them.

This means that selling their foreign property will only cover some of their outstanding debt they owe to the lender. If these homeowners cannot keep up with mortgage payments as they attempt to sell on their property abroad, they could find their place in the sun repossessed by their lender.

However, this is often not the end for expats. If they still owe money to their lenders after a property is repossessed, many think that they can pack up and leave the country and that will be the end of the matter; they can return to Britain poorer but slightly wiser about the dangers of properties abroad. But foreign lenders can pursue them for the outstanding money through the UK courts.

The most worrying thing is that lenders can apply for an order against assets homeowners have in the UK—including their British home. This can often result in debt collectors being ruthless about collecting any assets and hounding families who have no means to pay, especially with the demands of bills and mortgage payments in the UK.

Ignoring the orders and hoping the debts will go away without taking any advice or action can often result in the worst being threatened; losing a ‘safe’ home in your home country because of mortgage debt accrued abroad.



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Keep an eye on European trends, say EU Property Solutions
20 October 2017

The news is our first port of call for information about what is going on around us.

Despite vast amounts of news being produced on a global scale every day, many of us are inclined to only pay attention to the stuff that is happening near us and will have a direct impact on our lives. We are advising to keep yourself in the know when it comes to European trends.

This all changes if you purchase a property abroad though.

If you own or have a mortgage on a house in a European country like Spain, Greece or Portugal, you’ll need to be sure that you are keeping up to date with everything that is going on in these locations as it could potentially be impacting on your property or finances at some point down the line.

In case you missed some of the big property trends where your holiday home is, we’ve rounded up some examples of what’s going on now so you can be sure you remain in the loop regarding your property abroad.

Residential property sales in Spain are increasing 

Spain’s economy is the fastest growing within the Eurozone, which is good news if you are looking to sell your Spanish holiday home. The value of property in sunny Spain also increased during the first six months of 2017, so if you do sell you may be able to pocket a healthy amount of money back.

House prices in Italy should stabilize soon

Italy is still in the process of working its way out of a significant financial crisis, but it looks as though property prices should be at a steady level by next year. This is good news for anyone who is fearful that they may be left in negative equity.

The luxury housing market in France is on the rise

France boasts the title of the most visited country in the world, with an astounding 82 million tourists passing through every single year. There are also reports that the French real estate market is on the rise, with an increase in interest from both commercial and domestic buyers. The luxury market is said to be experiencing the most activity, with properties priced within the region of $2 million – $4 million seeing the most interest from buyers.

Property prices in France are rising

The central German city of Frankfurt has seen residents from outside the country moving in, which has resulted in more construction activity. Despite more properties being built, there is still a gap between supply and demand, which has resulted in a rise in property prices.



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Things to consider before buying a property abroad
20 October 2017

 

While the idea of spending endless summers lounging around a pool in a gorgeous villa is appealing, a lot of time and care needs to be taken before you take the plunge and invest in a property abroad

Buying a home in the UK is hard enough these days, so factor in the language barrier, currency exchange, potential visa or resident issues and a lack of knowledge regarding foreign markets and interest rates and you’ll begin to understand why an investment in overseas property can be somewhat tricky. Before you pack your suitcase and make a rash decision, read on to find out what you should consider before you commit to purchasing a property abroad.

The property’s rental potential

When the summer is over and it’s time to head back to dreary old Britain, your holiday home will be left empty. Rather than leaving it unoccupied, it’s worth considering the prospect of renting it out during the months you won’t be staying there.

If you do choose to rent your property out, it’s worth giving some thought to these additional concerns. Firstly, does the location you are choosing benefit from dual-seasonality? If your place can be used both in the summer and winter months it will be a much better investment. You will also need to check out the local rental laws as you could be caught out if you are required to license the premises or collect tourist tax. It may also affect the kind of mortgage you have and will have implications on your own personal tax and the cost of insurance.

The market that you are entering into

While you may be well-versed in the property market in the UK, chances are you don’t know much about the day-to-day realities of the market in foreign countries. If you’re planning on buying abroad, it’s imperative that you become familiar with the property market in your country of choice. Be sure to keep up to date with interest rates and the volume of sales occurring as this will give you a clear indication of when and where the best place to buy is.

How much expert advice you will need

 When dealing with a large investment like buying a property, it’s no good trying to do it on your own. Accept that you will need to seek help from people who know what they’re talking about. Contracts may be written in different languages wh ich could make it difficult for you to decipher what you’re getting yourself into. Under no circumstances should you sign something that you don’t understand, so a translator will need to be present before you put pen to paper.



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Increased Repayments On Spanish Mortgage Products
07 April 2017

Our Spanish Legal Team in San Pedro have reported a worrying trend in some Spanish mortgage products. Many of these products are now moving away from their 10-year interest only period and moving to repayment. The issue we are finding is the jump in payment amounts is very substantial. So substantial that repayments are have increased up to 3 times the initial amount. 

We have come across investors who's mortgages are moving from interest-only to repayment, the jump in the payment amount was €1,000. More worryingly, this repayment is now commencing when the many are reaching retirement age. This highlights the loose lending practices of lenders pre 2008.

Many ask can I leave the keys to my property with the lender and walk away. You can, BUT the risk involved is very high. By doing this you are putting your home assets in jeopardy. In some cases, the banks can react negatively and aggressively and place a charge on your own home in the UK or Ireland. It is essential that should you no longer wish to maintain and keep your Spanish property that you amicably liaise with the lender. Seek specialists in European Property, there are numerous experts who can advise and liaise on your behalf.

If your mortgage rate is changing and your monthly repayment in Spain increasing and you wish to dispose of the issue then see the correct help. 



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