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Overseas property buyers urged to be cautious

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People who are planning to purchase a property outside the UK have been told to be cautious.

According to Knight Frank International, there are various locations where real estate is now much cheaper than it was a few years ago, the Telegraph reports.

However, partner at the group James Price said this does not necessarily mean buyers can get a good bargain today, as many of these markets are still some way off a recovery.

Spain, for instance, was flagged up as one location which is yet to pick up, along with some highly developed spots in the Algarve region of Portugal.

"Put another way, certain spots may still be considered reassuringly expensive," Mr Price commented.

"The trick I would say is to look at firmer markets - getting good value rather than a bargain is probably a good tack."

Nevertheless, some analysts still believe Spain represents a good option for foreign property buyers who want to make the most of reduced prices.

Charles Weston Baker, head of Savills International, told the Telegraph that the Costa del Sol in particular offers a number of bargains at the moment.

Indeed, he said the drop in value of some properties has been "dramatic" in the last few years, as a result of banks looking to get rid of distressed stock.

Mr Baker stated that higher loan-to-value mortgages are currently being offered on real estate that is about 70 per cent cheaper than it was in 2008 - when the market was at its peak.

"This represents a great opportunity for buyers, who can borrow up to 90 per cent of the purchase prices and achieve very substantial returns," he commented.

The observations comes after Mark Bodega of foreign exchange specialist HiFX told the Guardian overseas property buyers in the UK are becoming increasingly risk-averse. He said ongoing uncertainty in the financial markets has led to most of its clients opting to play it safe.

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