Barclays and the Skipton Building Society have marked the start of the home-buying season by slashing the rate for its two, three and five-year fixed-rate deals and also some of its tracker mortgages. At Halifax and Northern Rock, managers have also stepped into the price war, lowering rates on their two and three-year fixed rate buy-to-let mortgages. Other high street lenders are expected to follow suit, offering deals in a bid to tempt homeowners.
David Hollingworth at London and Country Mortgages says there were increasing signs that the mortgage market is loosening up, even for first-time buyers. 'Swap rates, which fixed-rate mortgages are linked to, have fallen back quite substantially over the last week, so there’s room for lenders to get more competitive,' he said, adding: 'We’re seeing more lenders offering cheaper deals, even at 90 per cent loan-to-value for the first time buyers.'
BUYING PROPERTY IN CRETE
The property market in Crete has undergone tremendous change over the last couple of years. Eight years ago, everyman and his dog appeared to be buying a property in Crete, but then, in 2008, someone suddenly turned the light off and developers, builders and estate agents woke up to find nobody was out there anymore!
Now, in 2011, Snobby is the only builder in Greece regularly advertising in the UK – with full pages in publications such as A Place in the Sun and features in many national newspapers and magazines. What’s happened to all the developers and estate agents? Visit Chania and estate agent offices have all but disappeared. Where have they all gone?
Unlike Snobby, other developers are weighed down by bank borrowings and so highly geared they can no longer afford to advertise. They have been forced to follow the marketing route of estate agents by advertising only on the internet – because it’s cheap. Google ‘buying Crete property’ and you get 16,700 possible searches. What does that mean for you? Is it one man and his dog? A website can still be live long after the business has died. Buying a house is all about trust. So what can you do to ensure you are armed with the total picture and all risks are minimized?
WHO ARE YOU DEALING WITH?
If you’re researching on the web, check for a guarantee of integrity. AIPP is the UK consumer protection federation safeguarding the interests of those buying property abroad. Before a company can carry the endorsement of the distinctive AIPP green and blue logo, the financial and operational criteria of the business is strictly vetted to ensure exemplary standards are being met. Snobby is one of the very few building companies in Crete to be recognized by AIPP.
QUALITY OF INFORMATION
A thumbnail picture and a few words is hardly a sufficient basis on which to gain a real insight into a property. If you see a house of interest on-line, ask for more information. If a company cannot send you a printed corporate brochure enclosing property details, then you have to wonder whether you’re dealing with a credible company. Are you prepared to incur the cost of air tickets and accommodation on the strength of something and nothing you’ve only seen on the web?
CHECK THE COSTS OF BUYING
Use an estate agent and you’ll be charged 2% of the property price as commission. Yes, that’s right, the buyer AND the seller both pay 2%. Then there’s the property tax, Notary costs, legal fees, utility connections which can all add up to around 20,000€ on an average two bedroom house. It’s worth bearing in mind Snobby always INCLUDE all purchase costs within the house price, so you know precisely how much to budget. With any other company you need to allow anywhere between 10% and 18% ON TOP of the house price.
ARE THERE BARGAINS TO BE HAD?
UK property prices have plummeted. In Spain a vast glut of unsold properties have driven prices into freefall. However, house prices in Crete have remained relatively stable, due mainly to the ratio remaining fairly balanced between the number of buyers in the market and the level of property for sale. Of course you may find what seems to be a really low priced property, but you do need to tread extremely carefully when chancing across a real bargain – or it could cost you dear in the end. There’s no such thing as a free lunch!
Snobby is probably unique in Crete for having no bank borrowings and is therefore able to structure its costs far more economically than most. That is why we can proudly claim Snobby prices are the lowest in Crete for new build detached homes. Check out the Snobby specification and be amazed at the unbeatable value on offer. Now is the time to buy in Crete. Now is the time to view a Snobby.
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Typically a couple will receive a state pension of around £690 per month in the UK. It doesn’t take much working out to see that once you’ve paid the main living costs there is not much left over to feed and clothe yourself.
Those moving overseas do so because of the weather and the chance to enjoy a far better quality of life. Crete is a haven for Brits who move there because of the glorious weather - 320 days of sun each year – no freezing cold winters - the lowest crime rate in the EU – and friendly and welcoming locals.
So could you really live on an old age pension in Crete?
Taking average costs for a couple living in a two bedroom detached house we have first separated the annual running costs of a house, both in the UK and in Crete. To simplify matters we have converted euros into sterling.
UK COSTS Per Annum
Council Tax - £1,200
TV License - £145
Water - £350
Electric/Gas/Heating - £1,900
House Insurance - £400
Car Tax - £155
Car Insurance - £400
(Full no claims 3rd party 1.6 engine)
TOTAL COST PER ANNUM - £4,550
CRETE COSTS Per Annum
Council Tax - 0
TV License - 0
Water - £135
Electric/Heating - £1,060
House Insurance - £150
Car Tax - £130
Car Insurance - £400
TOTAL COST PER ANNUM - £1,875
Thus, like for like, you would be saving on out goings in the region of £2,650 by living in Crete. The main reason for this is due to massive savings on fuel costs. Due to the temperate climate, in the main, you don’t need heating until the evenings and then only over a four month period and for several months of the year free hot water is provided from your solar system. In Crete there is no council tax or TV license either.
The annual UK state pension equates to £8,280. On our typical expenditure above, that means you have £3,730 left over in the UK – or £6,405 if you live in Crete.
In the UK on your state pension that means an average budget of £309 left over per month to feed, clothe yourself and enjoy life. However, in Crete you’d be wondering what to do with £534 every month.
Without being extravagant in the UK you would probably need to spend all your £309 on food and housekeeping – which leaves zilch for clothes or going out – even if you could afford the petrol!
In Crete a monthly shop, full of goodies, would set you back around £280 – and that leaves £254, each and every month to indulge yourself. Eating out at a taverna, with house wine, would set you back around £20 or so, per couple. On that basis you can afford to eat out twice every week and still have around £100 left over from your pension each month.
Moving to Crete requires careful planning with one eye on the future. It’s far better to go for something smaller, leaving you with a nice little nest egg, than spend up to the hilt on a huge house, out in the wilds, on acres of land. Living that dream could well end up a nightmare and exhaust your savings.
As you get older you need to be a short stroll away from amenities and close to a bus service should you be unable to drive. Snobby design their homes to appeal especially to the UK market. The properties have a high specification and we proudly claim to provide new build detached homes at the lowest price to be found in Crete. What’s more the prices are all-inclusive of purchase costs, taxes and legal fees – so you know precisely what to budget for.
Snobby has several small developments of bungalows, set quietly away, yet within a stroll of the village. Icarus Court is a prime example, with four properties in the village of Sirili and our development at Gerani - Village Walk - where we are building three homes.
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Consequently a journalist commissioned to write an article about buying property in Greece sits behind a desk in his London office and is forced to research in the same way as you – by surfing the net. So what’s wrong with that?
When you come to live in another country you will often base a decision by falling back on a lifetime’s experience of living in the UK. “We do it like that in the UK – it must be the same here.” Well often or not, it isn’t. Ill-informed ex-pats in Greece will inadvertently post incorrect answers to questions on internet forums. This is then picked up and the word spreads onto other sites to become urban myths which are then, in turn, published in mainstream media.
Can you hear my drum banging? It’s a subject close to my heart - the deafening sound of Chinese whispers you hear on buying property in Greece.
So, from someone on the street as it were, let me attempt to set the record straight.
BUYING PROPERTY IN THE UK
As a buyer in the UK you know you will have to pay legal fees and stamp duty, dependent upon the house price. Meanwhile the seller will have to pay his own legal fees and the sales commission charged by the estate agent.
BUYING PROPERTY IN GREECE
In Greece it’s a completely different ball game.
Nowadays Snobby is virtually the only builder in Crete advertising in UK publications such as A Place in the Sun. All the rest can only afford to use the internet and local estate agents. What does this mean?
Say you stumble across an estate agent's web site in Crete and fall in love with a resale two bedroom house , and want to buy it for an amazingly low 115,000€. How much will you really have to pay?
In Greece, it is BUYERS who incur fees from the estate agent, up to
2 ½% of the house price. The same percentage is also charged to the vendor. However, it has been known for a seller to say, “I do not wish to participate in paying these fees.” In which case you could end up with paying up to 5%, depending on how much you love the house! That could set you back up to 5,750€.
In Greece, lawyers do not draw up contracts. This is undertaken by the Government Notary who will also verify how much tax is to be paid – dependent upon location and size of land. Unlike the UK where you buy the deeds to a house, Greek law is different. The contract, supported by a topographic survey, drawn and registered by an official structural engineer, goes into great lengths to describe the specific dimensions of the land – for in Greek law whoever owns a plot of land is the legal owner of whatever is built upon it – albeit if someone inadvertently builds on your land, it’s yours!
The Notary will determine the amount of tax you have to pay, which is based upon the objective value of the property and could be, on our example, perhaps 50,000€. Currently you will have to pay 9% of this sum on the first 14,673€ and then 11% - 13% on the balance, which is determined on location. The Government Notary will levy a fee of 2% on the sale price of the property – and your lawyer will charge 1 ½%.
All these charges can add up to around 14,000€ or more, making the bargain buying price look a whole deal less attractive at 129,000€.
Snobby’s are now built with thermal brick for superb insulation and a host of new features for 2011. Even so, you’ll find when you add all the buying costs and compare what you get for your money, then it becomes obvious that Snobbys always provide far better value.
It’s also worth noting that a resale property comes with no guarantee and depending upon age may not conform to the latest anti-seismic build standards, or meet current planning requirements.
When you make true comparisons it is small wonder that Snobby is doing so well.
Make the comparison, do the math and you will find Snobby’s policy of all-inclusive prices PLUS an unbeatable specification means we can say categorically that Snobby’s represent the best value and lowest prices for new build detached houses you are likely to find in the whole of Crete.
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The market has now largely changed to those aged 55+ who are looking to make a permanent move overseas. Why? As the baby boomers approach retirement age so they are discovering the income they believed they would enjoy from their pension has dramatically shrunk. Conventional savings generate a minuscule return and UK property prices have fallen - and are set to continue falling. Consequently people have to face up to the reality of having to lead a very austere lifestyle throughout old age - or continue working. Its small wonder that many people are extremely annoyed, having worked all their lives only now to be faced with an uncertain future. Government research shows over 40% of this age group are planning to move abroad, where they can afford a better quality of life.
So what can you expect to find in Crete? Don’t believe all the bad publicity the country has received over the last year?
Throughout 2010 the UK press has been unfairly banging on about how Greece is bankrupt and society has taken to the streets in protest. Now it would appear UK pigeons have come home to roost, what with demonstrations, riots, injuries, and a pending winter of discontent. While the British government has been slow off the mark to react to the problems the nation faces, the Greek government was far more courageous and acted far quicker to put in place draconian measures to reduce its fiscal deficit. Praised by the International Monetary Fund and the European Central Bank, Greece is now on target to reduce its fiscal deficit to below 3% of its GDP by 2014. To put that figure into context, steps the UK government is putting in place would only appear to bring the country’s GDP down to a figure of around 5%!
The economic pain in the UK has hardly yet been felt, with inflation and cost of living set to rise markedly in 2011. However, in Greece the austerity measures have already been applied and while VAT was increased the main focus of cuts have been on the public sector, reducing bureaucracy and reforming the tax system. Thus, in the main, any changes to the cost of living have already been factored in and UK couples coming over now, with a pension of 1,000€ per month, can look forward to enjoying a far more comfortable lifestyle than in the UK – and that’s not to mention the glorious 320 days of sunshine a year.
To live in Crete you don’t have to worry about council tax. There isn’t any - apart from 10€ or so included in each utility bill. Typically your metered water will cost around 100€ a year and electric for a detached two bedroom house, like one of our Snobbys, will set you back around 800€ per annum – or less if you have one of our renewable power systems. Because the winter is not as cold as in the UK, with temperatures never getting down to zero – even at night, generally you won’t need any heating during the day. Imagine the saving compared to the UK?
As you get older healthcare is always a concern. A private visit to a consultant in Crete costs around 50€ and the most up to date technology is available to you, with results invariably obtained there and then. A DVT scan for example costs just 60€ - and a full body scan around 600€. That’s a fraction of what it costs in the UK. Healthcare in Greece is free to all those of pensionable age and in Crete the hospitals do not have MRSA. The only downside to the excellent treatment is that culturally personal nursing is undertaken by a family member which invariably means hospitals tend to be a little noisy. You can of course opt to have a private nurse.
Living in the UK, as you get older crime becomes a real worry. Crete is as safe as houses and has the lowest crime rate in the EU.
There is no doubt, apart from the wonderful weather, healthy food, glorious scenery and the friendly people; Crete allows you a tremendous opportunity to enjoy a lifestyle which the UK just cannot even get close to. Come on over. You’ll be quids in!
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With much smaller pensions than they originally thought, with years of austerity ahead as government tackles the national debt, a crumbling health service - and not to mention miserable weather half the time - what is there to look forward to? It seems the great silent majority is taking life by the scruff of its neck and doing something about it. Research by the Foreign Office show that nearly half of Boomers plan to move abroad where they can enjoy a better quality of life, in the sun.
Moving to the sun is exciting and will give you a new lease of life, but it’s important you buy the right property and don’t get carried away letting your heart rule your head. This five point plan may be obvious, but it’s all too easy to throw caution to the wind. For your future happiness you need to get it right and, as Snobby owners already know, they got it right!
POINT ONE - Choosing the right location
Property in tourist locations tend to be expensive and in the winter everywhere shuts down. Far better to consider a working village which is open all year round, where there’s at least a mini-market and a place or two where you can eat out. Also, being near a bus stop makes sense, especially if in the future you find you cannot drive. Come to that a house on an elevated position could mean, as you get older, the steep slope may inhibit any walking.
POINT TWO - Build your own, resale, old, or new?
The gamut of buying land and building your own home may be a dream, but it’s fraught with bureaucratic danger, delays, will give you high blood pressure and will always cost you more than you thought. Resales can be risky unless your lawyer digs deep to check all building licenses are in place and properties may not necessarily comply with current anti-seismic construction standards. A stone derelict may have soul and be cheap too, but always requires a blank cheque to restore the property. Can you afford it? New build is the safest option - and invariably there is a guarantee too, which will ensure there are no unexpected maintenance costs to cover.
POINT THREE - Size matters!
While owning a huge plot of land may be your dream. In reality as you get older it will be impossible to maintain. Even if you are a passionate gardener will you be able to stand the heat having to work 24/7 to keep abreast with everything? Even a garden of 100 square metres is plenty big enough to grow all the vegetables you need for two and still have space left over for a garden of plants, pots, raised beds and the odd lemon tree.
POINT FOUR - Busting your budget
People arriving in Crete often seem to be sprinkled with fairy dust, with preconceived ideas flying out the window. PLEASE make a must have list, and in large letters, enter the budget you can comfortably afford. No matter what, never let your heart rule your head. Your budget should also include the figure needed to pay for all the purchase costs and taxes. Work on 18% on top of the house price as a maximum guideline. Far better to buy something beneath your budget than bite into your savings and prejudice your future lifestyle.
POINT FIVE - Financial security
Never, ever, send money directly to your lawyer, agent, architect or builder. Only ever transfer money from the UK into your own Greek bank account. The ‘pink slips’ confirming the monies you transferred from the UK need to be declared on your Greek tax return, or it will be presumed you earn a taxable income in Greece! On a new build, and especially buying off plan, you should always take steps to protect your deposit, or stage payments, should the builder happen to default. Only proceed with buying a property if you are sure any monies you pay over prior to completion is made legally safe.
At Snobby we work hard to provide exactly what the UK market is seeking. With Snobby you get amazing value and quality. In fact we proudly claim Snobbys are the lowest new build prices for detached homes you’ll find in Crete. Don’t take our word for it come on over and see!
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