The Daily Telegraph - Saturday - Money
Britons rush to buy homes abroad
The Covid-19 crisis has convinced many that now is the time to go. By Marianna Hunt
The number of Britons seeking property abroad has surged since the coronavirus outbreak, with some estate agents having a record year for overseas sales.
Knight Frank, an estate agent, has already sold more homes overseas this year than it did in the whole of 2019. Mark Harvey from the firm said the rise had been “quite extraordinary”. He added: “Six of our offices had a record year despite three months of people being sat at home.”
Savills, another agent, said new inquiries from Britons interested in buying abroad were up by more than 50pc compared with last year. Two of its overseas associates – QP in Portugal’s Algarve region and Beaux Villages in south-west France – have sold more properties this year than in any other, with Britons accounting for a significant part of the increase.
Mr Harvey said lockdown had convinced many people that if they could work from home, they could work from anywhere.
“The threat of more travel restrictions has played a part too. Having a place overseas gives you the flexibility to go on holiday last minute. It also means you can leave the country if there is another lockdown,” he said.
Europe has been particularly in demand, as many popular destinations can be reached by car from Britain. Inquiries from Britons looking to buy in Europe are about double last year’s level, said Savills’ Hugo Thistlethwayte.
Not all buyers are purchasing second homes. Aedas Homes, a Spanish property developer, has also reported a rise in interest from Britons and said that since the pandemic started more were looking to relocate permanently. A fifth of the firm’s British buyers this year said they were purchasing a primary residence, compared with none in 2019.
“People are counting on spending more time in their overseas home, so demand to live in ‘ real’ places with local communities, fast internet and good international schools has boomed,” Mr Thistlethwayte said.
Three of Knight Frank’s offices that have had record years in 2020 are within or close to major towns or cities: Cannes in France, Geneva in Switzerland and Lucca, near Pisa in Italy.
But while demand has surged, it has become increasingly difficult to actually do the deals. “We have lots of viewings lined up but people are having to wait until travel restrictions are eased,” Mr Thistlethwayte said.
Some are so desperate to buy they are not prepared to wait. One Knight Frank client asked the agent to fly a drone around a chalet he was considering buying in Verbier, Switzerland. “He was controlling it so he could check if he liked the views. He made an offer the same day for 5.8m Swiss francs [£4.8m],” Mr Harvey said.
The “Covid effect” has not only been felt at the upper end of the market. Property websites Rightmove, Zoopla and A Place in the Sun, which cover all price brackets, have also recorded a jump in inquiries from Britons wanting to buy abroad.
The most sought-after location on A Place in the Sun has been Spain. There, potential buyers were looking to spend on average £ 156,000 for a property. France, Portugal, Italy and Greece completed the top five.
People looking to buy in Portugal were willing to spend the most of these five – £ 297,724 on average – while in France buyers were typically looking to spend just under £174,000.
Sandy Alexander, 55, and his wife hope to relocate permanently to Spain in April. The couple, who live in East Lothian, bought a property in a village near Alicante a few years ago and have recently decided to put their Scottish home and dry cleaning business up for sale. “This year made us realise that life is too short. Now is the time to make the move,” Mr Alexander said.
They are hoping to sell their home for about £ 800,000, which would allow them to retire once the business was sold. “The cost of living is much lower in Spain too, which helps,” he added.
Mr Alexander said the Spanish removal company he was dealing with said it was inundated with bookings from Britons relocating. “Lots of people we know are thinking ‘ To hell with it, let’s go’.”
Tom O’Brien of Brewin Dolphin, a financial planner, said people working remotely abroad should check there was a treaty in place that ensured they would not be taxed twice.
“In order to be classed as a British resident you would need to spend more than 182 days in the country in any tax year,” he added.
Buyers should also bear in the mind the Brexit withdrawal agreement deadline, which falls on Dec 31.
“As long as you move to an EU country and apply for residency before the end of the transition period, you should still be able to access reciprocal healthcare and your state pension as before. After this your rights will change and there could potentially be extra taxes to pay when buying property,” Mr O’Brien said.