Property investment overseas is finding favour with UK property investors once more as UK investors seek to find new ways of building up their savings and pensions investments, and to offset some of the drop in value they’ve seen in their own home in the UK.
UK house prices have been sliding downwards since the banking failures of 2008 – a knock on effect of the the US sub-prime mortgage product scandal which resulted in catastrophic failures in the banking industry. A bail out by the UK Government has not necessarily led to increased consumer or business lending, however, as banks are keen to build their reserves and this means that credit is still hard to get. Savings rates remain low because Governments are keen to keep interest rates down as they fear pushing the economy into recession even further.
While small percentage increases in recent quarterly economic growth mean that technically the UK is no longer in a recession, there is no doubt that the days of ‘easy-to-get’ consumer borrowing and inflated house prices are over. No longer will consumers be able to draw down equity through remortgaging based on a perceived increase in value in order to maintain their current lifestyle. It is thought that UK house values will have to decrease by as much as 20 per cent in order to restore equilibrium between house values and the newly tightened mortgage lending criteria.
Pensions have taken a hit ever since the UK Government stopped the tax benefit to companies for topping up an employee’s pension.
Even looking further afield for investments, with the UK GBP (Sterling) virtually at parity with the Euro, it has become increasingly difficult for the UK investor to find areas to invest in overseas which will yield a solid, safe return.
In Europe, there is no cross border bank or regulatory authority for the whole of Europe. This means that each country is taking responsibility for managing its debt caused by the failure in the banking industry. The agreement in Europe is that the EU will vote to help each country on an individual country by country basis, should the need arise. Greece has been the first to ask for help. Spain has been one of the hardest hit. Portugal however is one of the very few to emerge virtually unscathed. House prices are still rising and it has a strong economy backed by EU funding and good levels of foreign investment. These are the main reasons why Portugal is becoming an increasingly popular choice for the wise overseas property investor.
No longer is it enough to say that flight times from the UK are short; that the country is easily accessible by the low budget airlines, and that there is plenty of sunshine, wonderful beaches and golf courses, and free medical care for overseas residents.
Now the discerning investor is asking more penetrating questions concerning a country’s economic state of affairs, its indebtedness and relationship with the EU, and attractiveness for foreign investment.
Portugal is one of the few EU countries which really does have it all. With an Albany Hill property investment in Portugal, the investor will reap the economic rewards as well as the lifestyle rewards and can sleep easy at night knowing that they have found one of the few solid overseas property investment opportunities located in a beautiful environment, close to the UK homeland, which will be safe and secure and return handsome dividends in years to come when it is time to retire.