The overseas property market has always been of interest to investors and people buying a future retirement home. But with the UK buy-to-let market becoming more costly in April because of the UK Government’s proposed tax increases, overseas property and mortgage specialist Simon Conn believes buyers could be considering more seriously other international destinations in 2016.

The most popular places to buy abroad from the enquiries he received last year were Spain, France, USA, Portugal, Ireland and Italy. Interest has been growing in South Africa, although there are not many mortgages available, and Greece and Cyprus were also popular.

Spain

Taking France’s crown as the number one destination for buyers. Spain is a very popular holiday destination and when people are staying there, they often think about purchasing, instead of renting or staying in a local hotel. Loan-to-value rates are now up to 70%. Be careful what you are buying as the number of agents/developers in the market has increased dramatically. Ensure you carry out due diligence, looking into their past experience and recent sales (for example, quality of build, delivery times etc).

France

Slipping to second place but still buoyant. Buyers are taking advantage of very low interest rates and mortgages are still available up to 80-85% loan to value. Before the recession, only the more expensive areas were popular, but currently all regions are of interest.

USA

Hanging on to third for the second year running. Enquiries for higher priced properties continue, usually in the $500,000+ price bracket. New York, Florida and California continue to be the most popular places.

Portugal

Like Spain, Portugal has also seen an increase in the number of agents operating. There are higher loan-to-value mortgages available up to 80% loan-to-value. People have recognised the quality of the build, the lower density of properties in the surrounding area and the potential value for money.

Italy

Still busy with interest rates remaining low. However, the maximum loan-to-value rate is now 60%, having been at 60-70% last year.

Greece and Cyprus

There is still no lending available in Greece via Simon’s lending sources, unless the property is valued at €1million+. Good news however, that lending in Cyprus has now returned, with loan-to-value rates of between 60-70% and a minimum loan of €50,000. Still be careful about local legal and title issues.

South Africa

Very popular, even though there are concerns regarding the economy and civil unrest. Lending is still very restrictive, with only 50% loan-to-value if you are a non-South African national, or 70% if you are a South African expat. Interest rates are around 9.50-9.75% and mortgages are still only available in Rand.

Turkey

With its low priced properties, buyers are still enquiring. Interest has waned in the last year, probably due to the troubles nearby, and therefore people have become more attracted to Western Europe.

Other countries where there is some interest include:

Australia and New Zealand

Both are popular for retirement and long term investment.

Dubai

More people seem to be going back to look now, but there is still a glut of rental properties leading to lower rental returns. Purchasers are buying mainly for holiday, retirement and work purposes. Lending is restrictive and you may have trouble financing some developments, as banks may not lend on those properties.

Caribbean

No specific island is showing any particular interest and seems to be more attractive to North America and Canada clients rather than Brits. Restrictive lending is in place in certain Islands.

Thailand

There is less interest in Thailand and lending is restrictive. If you are a foreigner, you can only buy a condominium or apartment and are not permitted to buy land or houses.

Also worth a mention are Canada and Switzerland, which are popular with ski enthusiasts and for holiday homes. There is also interest in Canada for retirement properties.

Holland has a lot of interest from expats for future retirement and also work-related purchases.

In Eastern Europe, the more popular countries for non-UK buyers are Hungary, Poland, Croatia and Czech Republic. Properties are low priced, but lending is restrictive.

Simon’s top tip for 2016 is Germany, where interest is increasing, particularly for investment purposes in large cities. There are signs more lenders are coming to the market for foreign investment.

Be aware that if you are looking to buy abroad for investment purposes, the majority of lenders do not take into account rental income.

Mortgages are based on affordability, your whole overall financial/credit record and, of course, the valuation of the property.

www.simonconn.com