A new life in the sun

Thinking of retiring abroad? Jeremy Gates looks at the property market for British buyers, and explores some of the pitfalls of a dramatic relocation?

Although Britain's property market has hit a stalemate - sellers refusing to cut prices, buyers unable to pay; which could last for months or even years, the attractions of moving abroad to enjoy life in the sun have never been greater. Britons have £2.4trillion tied up in the value of their homes, which means today's 50 and 60-year-olds are the richest retirement folk this country is likely to see - able to sell family homes in this country and cash in for a new life abroad.

In Spain, British ex-pats already own more than 750,000 properties - but "no frills" flights across Europe are luring British buyers to areas where prices are a fraction of those on the Costas. Prague was a magnet to overseas buyers long before ten new countries joined the EU in May 2004. Now the spotlight is shifting to Vilnius, capital of Lithuania, where two-bedroom flats have doubled in value to around £75,000 after an Irish "invasion" in the last couple of years.

In the remote countryside of Northern Italy, the agency La Casa Emilia sells two-bedroom period homes in land from little over £100,000. In fastemerging Eastern Europe, Bratislava is the latest capital to be tipped for soaring price growth and good-sized flats in many areas are still found in the £40,000-60,000 bracket.

Bulgaria, set to join the EU in 2007, has apartments from around £20,000, which, say agents Bulgarian Dreams, promise sun in summer and skiing in winter. In Cyprus, where British buyers account for 60% of total foreign investment, new flats snapped up from around £90,000 go to buyers convinced the advent of the Euro in 2007/8 will lift the economy to new heights.

In Crete, Oonagh Karanjia at Crete Property Consultants is a genius at seeking out little-known village gems. Her latest list includes traditional village house with three large rooms and a roof terrace around £17,500, and a newly built house in for around £50,000. The dream of living a totally new lifestyle abroad has therefore probably never been easier to attain. But is it quite as simple as it looks?

Says Ben West, author of Buying a Property Abroad: "Far too many people buy abroad in a rush, taking none of the precautions they would in their home country, intoxicated by the pleasures of a holiday but without investigating possible alternatives, pitfalls and disadvantages."

West says buyers abroad shouldn't count on anything like the property price boom we are used to in Britain - because any rise in value could be largely swallowed up by local capital gains taxes if you resell.

With the fate of so many local property markets hingeing on the easy availability of "no frills" flights, buyers need to ask if prices would crash if these services stopped. Selling holiday home abroad is often a difficult and long drawn out business - not least because agents and buyers in many areas focus their attention on new-build schemes instead.

Never assume, as communities awake to the probability of rapid economic change, that your plans to restore old buildings to their original glory will always be welcomed by the locals. In France, newcomers with grand schemes fall foul of the Mayor at their peril. In fact, it might be easier to let the professionals handle major renovations. In the ancient village of Tourrettes sur Fayance, near the perfume capital of Grasse on the French Riviera, French developer MGM is adding 45 apartments to a tiny community of barely more than 2,000 people, which is seeing the first new building in 15 years.With garages concealed beneath lawned gardens, one-bedroom flats begin around £130,000 and

"Far too many people buy abroad in a rush, taking none of the precautions they would in their home country, intoxicated by the pleasures of a holiday but without investigating possible alternatives, pitfalls and disadvantages."

three-bedroom apartments from just over £210,000.In a community like this, it is almost essential to speak the local language to use local shops and amenities - while owners in a gated community of ex-pats on the Algarve or the Costa del Sol can probably get along quite happily speaking nothing but English.

The big worry for many British buyers abroad, is whether their health service can match ours when it comes to our senior years. This has been largely solved by the fact that many now prefer to take their chance in a Spanish or Florida hospital rather than in the beleaguered NHS.

But Ben West warns that foreigners can be saddled with large health bills in countries with reciprocal health agreements with the UK - while

"Many people going into the B&B business underestimate the cost, and overestimate how long the season will last."

reciprocal agreements do not even exist in the US, Canada, Switzerland and Japan. Ben West also gives a specific warning to hundreds of British ex-pats who hope to boost income abroad by running a B&B business, often largely for other British visitors. "Problems can be compounded by too many people doing the same thing in the same area," writes West. "Many people going into the B&B business underestimate the cost, over-estimate how long the season will last - and find themselves working a 60 hour week, greeting, washing, ironing, cooking doing the paperwork and redecorating, just to show a profit".

West's warning needs to be seen in a wider context. While TV continues to depict the idea of living abroad as an impossibly attractive dream, the reality in so many cases - on a rainy February day six miles behind Spain's Costa Blanca, for example - can be very different. Once abroad, you must either make new friends in a social group in which you feel entirely comfortable - or develop a self-sufficient lifestyle, which is totally different to the lives most of us lead in Britain. It's a big step, so there is no need to rush. Why not sell up, and rent a home for a while in an area that interests you, so you can judge more accurately its attractions as a permanent home?

INFORMATION
'Buying a Property Abroad' by Ben West is published by Cadogan, priced £12.99.

Agents include:
MGM French Properties
0207 494 0706
Crete Property Consultants
0207 8328 8209)
Cyprus agents include:
Antonis Loizou
0800 032 6203
Halcyon properties (Cyprus)
01323 891639
Bulgarian Dreams
0800 011 2750
La Casa Emilia
0845 331 2812)
Financial advice on buying property abroad is available from:
Conti Financial Services
01273 772811
Ultra Villas of Cheltenham has produced a comprehensive guide to buying property in Spain available on:
0800 180 4894