In the years before the global economic crisis, purchasing a foreign property became increasingly popular with people from the UK, and despite the worldwide downturn, buying a home abroad remains a popular aspiration with many Britons today.
Many have snapped up real estate in established holiday hotspots such as Spain, Italy and France, while others are seeking out opportunities is less well-established markets such as eastern Europe and north Africa.
However, people's choice of destination has largely depended on exactly why they want to buy a property. Dreams of enjoying sun, sea and sand on a daily basis have prompted many Britons to purchase a house outside the UK, with some keen to escape life at home and live out their days in exotic foreign climes. But others are guided purely by its investment potential, with buyers primarily considering how much money it can generate.
The pull factors of investment and lifestyle destinations can often overlap. For instance, a popular holiday destination that boasts excellent weather, good amenities and attractive surroundings can offer a particularly strong rental market. Property investors can therefore take advantage of high demand for temporary accommodation in the area by letting it out to visitors throughout the year. Even if the owner does want to use it personally and go there for holidays, allowing tourists to stay there when it would otherwise be unoccupied can often be lucrative and a very good way to make the best use of this asset.
Other investors may choose to target locations with strong rental demand from workers rather than holidaymakers, such as major cities in fast-growing economies, or perhaps places where house prices are going up at a particularly high rate, so they can snap up a property at a knock-down price and sell it on at a profit at a later date. Overseas property offers lots of revenue-generating opportunities and since it is a tangible asset, it can be seen as a highly stable investment in these volatile and uncertain times.
Brazil could be a particularly good option for these investors, as it is enjoying strong economic growth as it gears up to stage two major international events. In two years time, Brazil will be hosting the World Cup, while the Olympic Games comes to the South American country in 2016. Flagship sporting events like these can leave a significant legacy behind in host cities, so businesses and property investors all over the world are becoming increasingly aware of its future potential and keen to take advantage of this opportunity.
For those who buy a foreign property to live there themselves, there can be many different motivations and guiding factors. The traditional image of a British expat was once of a cash-rich retiree who can afford to live out their twilight years in a sunny and relaxing destination. But with businesses now increasingly operating internationally, more and more people are having to relocate to other countries for work purposes.
However, many are not opting to remain overseas permanently or to stay in the same location while they are away. In fact, a new study by NatWest International Personal Banking noted there are now many different types of expat, with their own objectives and desired outcomes.
For instance, some were classed as globe trotters, keen to work for different companies in different locations, spending varying amounts of time in each country. Others were said to be taking up a temporary assignment outside the UK, with a view to going back home at some point in the future.
Although destinations such as France and Spain have long been popular destinations with expats, it appears English-speaking nations such as Canada, New Zealand and Australia are attracting lots of interest as well. This could be partly because of the lack of a language barrier, but their economic performance, infrastructure, amenities and job opportunities will also be key factors for expats to consider, along with their lifestyle attractions.
Both lifestyle and investment buyers could find plenty of opportunities in emerging markets. Liz Rowlinson, editor of A Place in the Sun Magazine, recently said some destinations in eastern Europe are likely to take off with overseas property buyers in the next few years, such as Montenegro and Albania.
But regardless of what people hope to achieve from a purchase outside the UK, Ms Rowlinson believes there are certain steps a real estate buyer must take.
"You have to be extra careful not to be swept up by silly prices and forget the fundamentals of buying a property – location, access et cetera," she commented.
Ms Rowlinson also insisted that purchasers take independent legal advice while they are arranging a deal, as well as to think about putting an exit strategy in place. This could help them ensure they are not lumbered with a property when they decide it is no longer required.
These tips can be useful for any property transaction, regardless of whether it is at home or in another country. Perhaps the lesson to be learned is that overseas property buyers must be just as careful and take the same steps they would take if they were purchasing a home in Britain.