Society
Go abroad to get on the ladder
Published 26 April 2004
Observations on house prices
When a couple of twentysomething friends told me they were buying their first home in Spain, I was amazed. "Think about it," they said. "It's cheaper, sunnier. And besides, we couldn't afford buying in Britain for another ten years at least."
The house, just outside Seville, has two bedrooms and a large garden, and cost just £18,000 (excluding renovation costs). The average home in Britain now costs more than £150,000 and in London, it is close to impossible to find anything below that price. You pay a minimum of £170,000 for one bedroom in east London. Yet in Spain, Italy and France, even newly refurbished homes routinely sell for less than 150,000 euros (£100,000). Some could afford that on a credit card.
A British estate agent based in Calpe on the Costa Blanca told me he had dealt with several first-time buyers from Britain, with few bureaucratic hiccups. A French estate agent in Brittany said he'd sold to a newly wed British couple and a single, professional woman in her late twenties. I contacted agencies all over France, Italy and Spain, saying I earned £18,000 (roughly the average for Britons in their twenties) and wanted to buy my first home. Far from turning me down, they wooed me.
I was told that I could get a mortgage of 50-80 per cent with a European bank to be repaid over 15 years, and at a lower interest rate than in Britain. I also found that banks such as HSBC, Barclays and the Royal Bank of Scotland provide mortgage plans to buy property abroad. So, for instance, I could get a 95 per cent mortgage for a property valued at £90,000. This could be a three-bedroom, terraced house with a garden near the Bagni di Lucca in Tuscany. Even with less than £85,000 I could afford a semi-detached, three-bedroom house near Jerez, not far from the beaches of Cadiz in Spain. A Spanish housing consultant told me: "It is a good investment for people in your financial situation to purchase over here."
Do you need to find a job abroad? No. Although many buyers start their own businesses, others keep working for UK organisations doing freelance work through the internet.
"If you're in a modern, flexible and creative job, you can do it from anywhere," said my friend - a graphic designer - buying the house in Spain. Will this be the next big economic migration?
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