Be brave when buying overseas

Britons are following their hearts rather than their heads when buying property abroad and opting for familiar holiday destinations such as Spain and France rather than countries offering true investment opportunities.

Britons are following their hearts rather than their heads when buying property abroad and opting for familiar holiday destinations such as Spain and France rather than countries offering true investment opportunities.

Apparently, Brits are not fully considering emerging markets such as Cape Verde, Morocco, Hungary, Montenegro and Poland – countries that offer them the opportunity to purchase at the lowest possible prices to maximise their return on investment.

There are 5.5 million British people living abroad and 200,000 Britons travelling overseas every year in search of property. Foreign Currency Direct (providers of best-buy currency for homes abroad) asked a representative sample of 2,315 people which country they thought was the best place to buy abroad.

The answer, unsurprisingly perhaps, considering how many Brits go there on holiday, was France and Spain. 'However,' says Peter S Ellis, chief executive officer of Foreign Currency Direct, ‘there are far more lucrative investment opportunities in lesser known destinations with emerging property markets.’

Property in Poland is an increasingly attractive investment opportunity for overseas buyers, and since Poland joined the EU in May 2004, much of the old red tape has been removed. It has been estimated that €15bn will be invested in the country from overseas over the next five years. That (combined with a strong economy and the introduction of the euro in the near future) puts Poland very high on the list for a lot of investors. Furthermore, recent investors have reported capital growth of up to 30% per year. Additionally, there is no capital gains tax when you sell your property after five years, or if you reinvest in another property within two years of selling.