Two schemes to avoid when buying abroad

There's little the British like more than buying houses - particularly cheap houses abroad. But beware of outlandish schemes which promise to make a cross-Channel bolthole more affordable.

There's little the British like more than buying houses particularly cheap houses abroad. In 1995, just over 100,000 of us bought a holiday home overseas; this year around 300,000 will do so. However, just as soaring domestic demand has driven up prices at home, so our manic buying abroad has driven up prices elsewhere (see chart below). Today, houses in the most popular countries such as Spain and France are beyond the reach of many buyers. Over the last ten years, prices in France have risen at 8% a year, and the regions most loved by the British (Provence, the Dordogne, Bordeaux and Brittany) have seen even stronger growth. Our view at MoneyWeek is generally that if you can't afford something, you shouldn't buy it. Unfortunately, this is not a view shared by many others. The result? The invention of some rather outlandish methods marketed as affordable ways to secure a "bolt hole" across the Channel. Here are two that we think you should be avoiding.

Buying abroad: Reversion schemes

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Jody Clarke

Jody studied at the University of Limerick and was a senior writer for MoneyWeek. Jody is experienced in interviewing, for example digging into the lives of an ex-M15 agent and quirky business owners who have made millions. Jody’s other areas of expertise include advice on funds, stocks and house prices.