Portugal Property Buyers Urged To Be Realistic

Interest in property in Portugal is increasing but potential
buyers have been warned to be realistic about prices and finance, according to
a local agent.

Viewings of property in the Algarve have tripled in recent
months.  However, many of these are
people with unrealistic expectations about price levels or the amount of
finance they will be able to secure, says a leading Portuguese property
expert.  Keep reading to learn
more.

Buyers have
unrealistic expectations about what Portugal property their cash will buy

According to Stephen Anderson, Portuguese property expert,
many potential buyers are arriving in Portugal with little idea of the current
price of homes.  He said: “More often
than not, we have to manage clients’ expectations which can be quite
unrealistic.

“We have found that many clients coming over on viewings
have very little finance to put down and arrive under the premise they will be
able to secure a high loan-to-value mortgage, which are in fact typically
constrained to borrowers that have, and can prove, a high income.

“Others, arrive with some €100,000 but have way
over-estimated what they will be able to purchase, expecting to find sea-front
apartment for that amount.”

While property prices in Portugal have fallen significantly
since the ‘credit crunch’, banks have simultaneously become much more stringent
with their lending criteria.  It is
possible to secure an 80 per cent mortgage, but interest rates on such loans
often exceed 6 per cent.

Mr Anderson added: “Clients should certainly be looking to
put down at least 30 per cent to have some options here, and be able to
demonstrate an income of at least £5,000 per month to be able to qualify for a
70 per cent loan.”

Nick Marr, director of leading overseas homes website HomesGoFast agrees.  He said: “Many
buyers are heading to the Algarve expecting to pick up a villa at a bargain
price and with 100 per cent finance.

“While there are some superb deals to be had, buyers need to
understand that they’ll still need a substantial deposit and be able to prove a
high level of earnings to secure the finance they need to buy.”