Turkey and beyond: rewards of buying in the risks and distant lands

You can read the articke from here;
http://www.independent.co.uk/money/mortgages/turkey-and-beyond-rewards-of-buying-in-the-risks-and-distant-lands-790195.html

Sunday, 2 March 2008

Our property prices may be stagnating but for Britons looking to turn bricks and mortar into profits, there is hope on the horizon – the far horizon.

Record numbers of investors are looking at a new raft of property hotspots around the globe – and Turkey is top of the list.

Overseas mortgage broker Conti Financial Services recently reported a 147 per cent increase in enquiries about Turkey year-on-year. For Spain, by contrast, enquiries fell by more than 28 per cent.

Property prices in Turkey rose between 15 and 20 per cent in 2007, reports estate agent Knight Frank, after a change in the country's mortgage law made finance available to overseas buyers. Yet prices are still cheap by UK standards. Julian Walker, managing director at Spot Blue, a UK agent operating in Turkey, says one-bed flats can go for £25,000, two-beds for £50,000 and villas for £90,000.

While no bank or building society on British soil will lend against a property abroad, finance for Turkish homes can be secured, through specialist brokers such as Conti, with a lender in the country. Foreign buyers will need a 25 per cent deposit, and sterling mortgages are available only over 15 years. Unusually, though, British investors living in the UK at the time of applying for finance may be able to borrow up to 100 per cent of the home's value in Turkey if the loan is in euros.

Large advances like this are confined to property in certain parts of the country such as the capital Istanbul, or Alanya on the Turkish Riviera. And as they are based on the "execution", or preliminary valuation), they may also be lower than the final purchase price, warns Conti.

Simon Conn, Conti's sales and marketing director, says: "While Turkey is being hailed as the 'new Spain', it is also undergoing some of the same problems, such as corruption and bad planning – although it is learning a lot quicker."

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