THE BAD NEWS
Leading accountants Pricewaterhouse Coopers, have published a report on the UK housing market claiming that house prices could remain below their peak levels for the next ten years. In other words there is a 50% chance your home will be worth less in 2020 than it was in 2007. They forecast house prices could plunge by 25% over the next three years.
Ed Stansfield – Chief Property Economist, of Capital Economics - goes one step further. He forecasts property prices will drop by 5% by the end of this year, followed by a 10% drop in 2011 and a further drop of 10% in 2012. In real terms that means the average home today, worth £162,000, will drop to £125,000 by the end of 2012! Take your time and money will just run through your fingers and be wasted.
Ray Clinn, Head of Pensions for Liverpool Victoria Insurance
says, “Britain’s over 50’s have already seen their pension pots damaged by the economic crisis in the UK and we estimate 28% of people aged over 50 will be forced to delay their retirement.” Do you want to spend the rest of your life having to work and then having to count the pennies just to live?
THE GOOD NEWS
We know there is a growing pent-up market desperate to leave the UK, as over the last two years Snobby has seen a positive upward rise in enquiries and number of appointments to view our properties. However, in most cases buyers are unable to make the move until they sell their house and generate the necessary equity.
Naturally everyone wants to get the best price they can for the sale of their house – but the question is can you afford to wait? Prices in Crete have remained relatively stable and are even likely to rise slightly in 2011. If you have a house in the UK with a market value of £162,000, by the end of next year you could have lost nearly £20,000 – and the year after that ANOTHER £17,000 – and that’s not to mention on-going expenses of council tax and TV license, and increase cost of living. The longer you stay in the UK the more money it’s going to cost you. The sooner you do something about it, the more you’ll save. Where would you rather be? Lying out in the sun enjoying a wonderful life – or sitting indoors worried about whether you can afford to turn the heating up?
WHAT TO DO?
Let’s say you’re coming up to retirement and your mortgage is paid up. Bite the bullet and put your house on the market for a quick sale. If you have an average priced house of £162,000, market it for £149,000 – that’s a huge drop of £13,000 – and makes a really attractive price for a fast sale. After the sale costs and legal expenses that would leave you with around £142,000 – on today’s rate that’s equivalent to 170,000 euros.
Move to Crete and as an example, take one of our Snobbys – a two double bedroom detached villa, standing in a spacious walled garden. That would cost you around 120,000 euros and that price includes all purchase costs, fixtures and fittings, so there’s nothing else you need budget for. You’d arrive in Crete, everything paid for, with a nice little nest egg of over 50,000 euros!
Factor in a UK state pension for a married couple of around 750 euros per month, plus a private pension of perhaps 500 euros and you’ll be living the life of Riley. A couple in Crete can live comfortably on 1,000 euros a month – and on top of that you have money behind you too.
Is it really worth losing out on the rest of your life because you want to squeeze that last penny out of your house – when likely as not you’ll lose money while waiting?
If you would like to receive accurate information on a property and living package in Crete just let us know and we’ll do our best to help.
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Having seen what appears to be happening in Greece, people from the UK are apparently very frightened - but why?
ARE WE LIKELY TO BE CAUGHT UP IN STREET BATTLES?
Emphatically no! There are occasional protest marches, but these only take place in central Athens near the Greek parliament. There are no signs of any unrest in Crete. Mind you, you’ll find the old boys in kafenions chewing the cud over what the government should or should not be doing. It’s the same the whole world over. Anything bad is great, providing it only affects someone else!
However, there is an agreed consensus in Greece that something has to be done to bring down the national deficit, and it is understood this can only be achieved with a lot of social pain. There is also agreement that the fault of all these troubles lie with politicians and the rich! Bit like the UK then?
IS OUR MONEY SAFE IN GREECE?
Emphatically yes! Greek banks did not follow the UK banks laissez faire attitude along the yellow brick road to ruin - nor did they have to be bailed out by tax payers’ money either. In fact Greek banks were one of the first in the EU to protect savers should a bank default against their obligations.
The bankruptcy headlines which plagued Greece were brought about because the money markets smelt profit and began to levy inflated interest charges, making it impossible for Greece to raise money and repay its loans. With the pan-EU financial package now installed this threat by the money markets against countries such as Greece, Spain, Ireland and Portugal now affords protection and with it consolidation of the euro.
IS GREECE A DANGEROUS A PLACE TO LIVE?
Emphatically no! If you’re living in Newcastle and see on TV a demonstration happening in London, do you suppose the whole country is up in arms? Of course you don’t. Greece and its islands are just as safe as they ever were. Culturally Greeks are brought up to honour guests and there is a genuine friendliness extended towards UK holidaymakers and those who live in the country permanently.
SO WHAT’S ALL THE FUSS ABOUT?
The Greek government has announced severe austerity measures to dramatically reduce its deficit over GDP. The UK government has to do the same and the British public will have to swallow the same bitter pill. However, average Greek wages are only 800€ - 1,300€ per month, which is not even half the average UK salary. And out of that, typically, employees have to pay around 250€ a month towards the equivalent of the Greek NHI. The majority of employment - just as in the UK - is in the public sector which is taking the brunt of cut backs. Wages are being cut by up to 20%. How would you react if your earnings were being cut by a fifth?
That apart, there have been occasional protest marches - but only in Athens - where matters have occasionally got out of hand, just as they do in London. Various job sectors have also been holding one day strikes - lawyers, banks, doctors, taxi drivers, and teachers. These are well publicized and in typical laid back style, locals put up with losing a particular service as it’s only for one day.
VAT went up and is going up again to 23% from July 1st. Duty on petrol, tobacco and alcohol has also been increased. However, the cost of living is still way below that of the UK. You can still live in Crete comfortably on an income of 1,000€ per month - and enjoy eating out each week without having to watch the pennies.
SO WHAT IS IT REALLY LIKE TO LIVE IN CRETE?
Crete accounts for 85% of the overseas property market in Greece and is where most Brits opt for as the place to buy a home. Apart from 320 days of sunshine a year, winters without any frost or ice, little crime and a good healthcare system, the quality of life is unbeatable - it’s almost the same as living in the UK forty years ago, when life was slower, there wasn’t an immigration problem, children showed more respect, there wasn’t the fear of walking the streets at night and none of this political correctness or litigation mentality. If these values are your values, if a land of sunshine is your ideal, if an affordable lifestyle is what you would love to enjoy, then come on over. You won’t regret it.
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The British media may be reveling in the traumas of the Greek economy – but at least the government here is doing something about it. Unlike the UK, where despite a deficit being just as dire, all parties remain like ostriches, heads firmly stuck in the sand, refusing to come clean and take the necessary drastic action to solve the problem. Before the taxing sword of Damocles falls and cuts your quality of life in the UK, isn’t it time to make the move and get out?
There is greener grass to be found in Crete. Brits who have taken the plunge now enjoy a lifestyle they couldn’t better in the UK.
Crete enjoys 320 days of sunshine every year – guaranteed! It has the lowest crime rate in Europe so you can rest easy, and a hospital system which is surprisingly good – with no MRSA or waiting lists. Housing too, is far cheaper. You get far more bricks for your pound in Crete.
COST OF LIVING IN CRETE
Sell up in the UK, buy a Snobby in Crete and chances are you’ll still have a nice nest egg left over. So you have a pension and investment income of around £12,000 per year. You can either stretch to make things meet in the UK – or live the life of Riley in Crete, where a pension goes a whole lot further. For a start there’s no council tax. Typically that’ll save you about £1,400 for a start.
What about everyday living? We did a little price comparison and took standard prices from ASDA and compared them with what you pay in Crete – using an exchange rate of 1.1€ to £1.00 and quoting all prices in sterling.
UK - ASDA ............................... Crete - AB Supermarket
£2.21 - Twinings Ceylon Tea - £1.38
£1.50 - Fairy Washing-up Liquid - £1.45
£6.78 - Persil Non-Bio - £4.05
£1.36 - Butter (250gm) - £1.29
£0.95 - Granulated Sugar (1 kilo) - £0.75
£0.64 - Tinned Tomatoes - £0.42
£4.10 - Premium Toilet Rolls 10 pack - £3.90
£5.98 - Pork chops (per kilo) - £4.08
£3.38 - Chicken thighs (per kilo) - £2.72
£0.76 - Potatoes (per kilo) - £0.63
On this basis our shopping basket, with a much wider range of products, cost 12% less in Crete. We did not factor in any special promotions, or own brands, at either supermarket, which would affect a true comparison.
Also, there is 21% VAT levied on food in Crete. How long will it be before the UK follows suit with the rest of Europe?
Typically a monthly supermarket shop of meat, fish, groceries and cleaning materials, for two people living in Crete, costs £200 - £400 depending how frugal you are.
A couple living in a two bedroom Snobby would be likely to spend the following each month. (Prices quoted in sterling)
Housekeeping - £400
Water and electric - £80
House insurance - £9
Telephone and broadband - £45
1.3cc Hatch back car – Car insurance and road tax - £40
Petrol - £45
TOTAL - £619
That leaves a disposable income of over £381 per month. Typically you can eat out, including wine, for around £20 - £25 per couple, so you can afford quite a few romantic dinners each month and still have money to spend.
LOWEST NEW BUILD DETACHED HOUSES IN CRETE
With the financial muscle of no bank borrowings, careful cost control and selling direct without the cost of agents, Snobbys are the best value you’ll find in Crete.
Our small developments of two and three bedroom Snobbys in the village of Drapanias in western Crete have sea views from roof terraces and are within walking distance of local amenities and the beach. Already three of the seven houses are sold. Prices start from 109,950€ - and that’s all-inclusive of purchase costs, legal fees and a high specification of features and luxuries other builders charge extra for.
In the UK a two bedroom detached house would set you back around £180,000 plus!
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It’s all very well taking the UK media’s arrogant approach of pillorying a mismanaged country borrowing too much, but people in glasshouses shouldn’t throw stones.
UK economists are saying Great Britain will be in the same boat as Greece with a similar budget deficit of around 12% of GDP. Government borrowing in 2010 alone is expected to hit 180 billion pounds. Is there any hoo-hah about that? No! What steps have the British government taken towards rectifying this horrendous borrowing? Nothing!
Greece is a small country without a manufacturing base, with a GDP amounting to less than 4% of the euro zone as a whole. Despite the furore on whether it will be bailed out by the EU, or calling in the IMF, Greece has taken draconian steps to bring down its deficit, and put its own house in order, without any outside aid. That should be applauded. When the UK economy ran into problems in 1976,with inflation running at 20%, the then Prime Minister Jim Callaghan had to run cap in hand to the IMF asking for help. Will history repeat itself this time?
It’s worth noting that Greece has taken steps to ensure its borrowings are reduced to the acceptable EU cap of 3% of GDP by 2012. On 16th March the UK government rejected calls by the European Commission to do more to cut its ballooning deficit. The UK is not expected to bring down its borrowing to the accepted level of 3% until way beyond 2015.
WHAT ABOUT RIOTS – WHAT ABOUT THE GREEK ECONOMY?
Over the last two years overblown credit and poor lending by banks almost brought Britain to its knees. Greek banks were far more sensible and did not follow the same path as their counterparts in the UK and USA - and being a cash society, there is not the same heavy personal borrowing in Greece.
As you would expect, when a government brings in austere measures, there are always demonstrations, but that’s not the whole country up in arms. Think back to the Thatcher years, did we all publicly march in protest? Of course not. Mind you, what with increased fuel costs and rumors abounding that VAT in the UK is likely to be increased to 20%, will you be taking to the streets?
In Crete we recently had a protest by farmers who blockaded the main highway, preventing the movement of traffic. You can imagine the headlines. However, the blockade lasted half an hour, traffic was allowed to pass and thirty minutes later up went the blockade again for a further half an hour. How civilized!
WILL I LOSE OUT IF I BUY A HOUSE IN GREECE?
Unlike the UK, Greece has not suffered from a plummeting housing market either. Consequently property prices have remained stable, with none of the fire selling of distressed sales that have gone on in Spain. Crete represents some 85% of the overseas property market in Greece and is recognized as being a prime holiday destination and popular location for buying property abroad. Due to this popularity EasyJet have just launched a new scheduled service of direct flights from Gatwick to Chania. This investment certainly bodes well and says a lot about the stability of the country and its continuing popularity.
VAT in Greece has just gone up to 21%, but on checking food prices, which attracts the full tax, groceries are still around 15% lower than in the UK. Mind you I recently read both the leading political parties in the UK are considering the option of putting 3% - 5% VAT on food!
The Foreign Office has just published research showing 42% of the UK’s 55+ age group are considering making the move abroad? Is it any wonder? You don’t pay council tax in Greece, the weather is glorious with 320 days of sunshine per year and a couple can still live really comfortably on an annual income of 12,000€.
Certainly from the increased response we are getting at Snobby, for homes in western Crete, there is a move afoot, which will only get stronger. Come on over. The water’s warm and life is good.
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For minor ailments you can do no better than ask the local chemist, who is trained to advise and recommend medication. He will also take your blood pressure too. Many times we have had visitors from the UK who are staggered to find they can buy their prescribed medication over the counter at the local chemist, far below the cost of a prescription charge in the UK.
Most large villages have a Medical Centre, where a Doctor will treat you, although it has to be said you will invariably be sent to see the Pathological Doctor (equivalent to a GP) in the nearest large hospital.
Don’t you have to pay?
If you are of pensionable age then you are entitled to free medical care and hospital care. Register with IKA in Souda road, Chania, to obtain an IKA Health Book, and you will be allocated the name of a local Doctor. By telephoning 184 – the national appointments telephone line – you can also arrange to be seen by a specialist consultant. However, this will be made easier when telephoning if you have someone beside you who can speak Greek. You will not be required to pay for medical treatment and prescriptions given under the IKA scheme may be taken to any chemist where you will be charged just 25% of the full cost.
You should also remember that personal patient care in Greek hospitals is not undertaken by nurses. Culturally patients are looked after by family members who may even sleep in a chair beside the bed. You can of course pay privately for a nurse if you prefer.
Hospital is never a place of enjoyment – and being in a foreign country and not understanding the language does little to help the stress and worry of an operation. Of the several Brits we know who have had surgical procedures, they have nothing but praise for the treatment they received from the Greek national health system. And unlike the UK there are no significant delays, waiting for an operation.
I DON'T QUALIFY FOR FREE MEDICAL CARE. WHAT ARE MY OPTIONS?
If your main residence is in the UK you can apply for an E121 Form from the Post Office. This card provides free hospital and medical care in Crete on a temporary basis.
If you intend to reside permanently in Greece you have two options.
PAY AS YOU GO?
Visit a local doctor – the equivalent of a GP – and you will be charged around 30€ for the consultation and a prescription. Arrange to see a specialist consultant and the fee is around 50€ plus the cost of any tests required. The Gavrilakis Clinic in Chania undertake blood and urine tests, x-rays, ultra-sound, MRI scans etc. The charge for an MRI scan for example is around 240€ which would normally cost several hundred pounds in the UK. In Greece you generally get results within 48 hours. The cost of an operation such as a hysterectomy for example would cost in the region of 4,200€ - which includes all surgery costs, private room, nursing care, medication and aftercare consultation.
PRIVATE HEALTH INSURANCE?
IMPORTANT POINT While you can receive private health insurance cover for life, you cannot be older than 60 years and six months before first applying for cover. Over this age you will be unable to take out private insurance cover.
There are many packages on offer from basic cover to the whole nine yards. A top of the range insurance from the Agrotiki Bank for example, provides cover - for a couple - and costs 2,200€ per annum. For that, you are covered GP, specialist consultant, surgery, private room, nursing care, post-operative care, medication and clinical tests. A cheaper package of around 1,000€ per annum, for a couple, gives you ‘hospitalisation’ cover of surgery costs and medical care.
For any emergency go to the Accident and Emergency Department in Chania Hospital at Mournies. Emergency treatment is usually good, you rarely have to wait too long to be seen and doctors usually speak some English. You should show your health card, IKA book or private health insurance. You will be required to pay a small cost for some tests, such as x-rays - about 5€ each – but if you are not covered by IKA, or don’t have private health insurance, you will be required to pay full costs for any tests.
All in all – no matter where you are in the world - nobody relishes the idea of hospitals. Just take solace from the fact that living the Cretan lifestyle is supposed to mean you will live a long and healthy life.
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