Buying property overseas: Expat hopefuls shrug off uncertainty in pursuit of a home abroad
Brexit/pandemic combination prompts new determination
The world’s expats are a tribe on the move.
The double hit of Brexit and the pandemic, with their myriad knock-on effects, seems to have made the overseas property owner even more determined. But not necessarily in the ways we might expect.
We know that significant numbers of UK citizens with homes abroad have responded to Brexit, and the subsequent regulatory and legal changes that have come with it, by taking steps to sell on their EU properties.
British travellers may now only remain in the Schengen area (the combined travel border-free area of the EU member states) for up to 90 days within a 180-day period without a visa.
And in some of the most popular countries for Britons overseas, such as Spain and Italy, changes confirmed in recent months have dramatically increased the slice of income or assets that must be handed over to the taxman for those living or earning in these countries.
The shifts have, unsurprisingly, prompted prompting many of those now non-EU residents who once spent several months each year living in their European homes to repatriate their lives and their assets.
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But not all of them. Others are taking the opportunity to widen their horizons further, tempted by the possibility of fewer restrictions on their movements as well as better value for money in other non-EU locations.
International property experts report growing demand in emerging, non-EU markets including Montenegro, Morocco and Turkey as well as the US, Canada and the Caribbean. Not only that, but the demographics of those realising their international ambitions have never been more varied.
Thanks to the massive shift in working practices prompted by the pandemic, along with the real-life proof that a remote workforce is a productive one, mean that the old restrictions over work demands, age and career planning are crumbling fast. There’s now no such thing as the typical expat.
Clear Currency’s own Chief Technology Officer, Rory Powis, who lives and work from his home in France, is one of them.
“I moved over here to be with my girlfriend, who’s French, several years ago,” he says.
“We’d been flying back and forth between France and the UK a couple times a month for a while by the time I moved here so it was a pretty smooth transition and I knew what to expect.”
The future is fluid too, though the couple expects to remain in France for at least another 12 months.
“We’ve spoken about living in the UK again for a bit to see which we prefer,” Powis says. “Or we might just pick somewhere completely random like Croatia!”
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Such fundamental changes in the ways we work and live are offering other, less obvious opportunities too, such as renting overseas property to workers demanding high quality bases from which to work, and even renovating existing properties to meet the needs of a transformed market that is no longer limited to short-stay holiday makers.
In fact, Peter Robinson, founder and director of the Association of International Property Owners (AIPO) points to an increased democratisation of the overseas property market, partly thanks to the turmoil of recent years.
“People who buy international property have a long-held belief, a genuine, deeply felt aspirational goal,” he says.
“There’s no doubt we’ve been through some crazy times. But in 2016, for example, the Brexit vote caused a huge surge in activity because people had that long-held belief that was propelling them to take action. They weren’t going to let Brexit stand in their way.
“Whether you run a corner store or a large multinational, the drive to buy a second home, a rental property, to work with a new view from your desk, to semi- or fully retire overseas is as strong as ever.
“These people are prepared to deal with the Brexit regulations, the Covid restrictions, currency fluctuations. What they don’t always do is plan effectively to manage that process.”
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“Traditionally, we saw older buyers drawing equity from a previous home or taking out a second mortgage,” Robinson notes.
“We’re now seeing younger adults take the plunge. No longer limited to simply moving out to the country one day, they are looking for homes overseas.
“But those in their 20s and 30s may not find it so easy to secure a mortgage and unless they’re very fortunate with high starting salaries, or have given nights out a swerve to plough money into investments instead,” he says.
That means most are likely to be cash buyers who have fallen in love with something online, but may need to rethink their expectations and go for something more modest when they hit the ground. The extra space to work may need to be an outdoor terrace, Robinson suggests.
Meanwhile, those who bought back in the 1980s, or 90s are now older, and life has changed. Many need to ‘rightsize’ for their new lifestyles with a smaller property either remaining in their country of residence or returning to the UK.
“They need to be careful and wise with their money wherever they go next,” Robinson warns.
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