Owning an overseas property is more than just a pipedream for many Brits. Research just published by accountancy firm Grant Thornton suggests the number of Brits owning a foreign property has trebled over the last 10 years, from 102,000 to around 300,000. And this figure is expected to exceed 1.5 million by 2025. In other words, one in ten UK homeowners will own an overseas property by then.

Of those questioned by Grant Thornton, the most popular reasons for buying abroad were as an investment (40%) and as a retirement home (38%). The latter is perhaps not surprising as the prospect of moving to a sunnier climate, and cheaper cost of living, is a strong pull for many. Soaring house prices in the UK also mean it's possible to sell a home here then buy a property overseas with some money left in the bank to help towards a comfortable retirement. However, whether buying for investment or retirement, the dream of buying an overseas home can turn sour if you're not careful, so it pays to do your homework and exercise a healthy dose of caution.

For most, the biggest decision is where to buy. The answer might be very different depending on whether you intend to live in the property or are simply buying as an investment. If the latter, you are unlikely to be concerned about the prospect of spending the rest of your life in that country and can emotionally detach yourself from the decision. Likewise, if you plan to retire then you really need to be comfortable you're buying in an area you'll enjoy living in. There is no point buying a bargain property if life there will be dismal.

Whether you buy as an investment or to retire, you need to bear in mind currency risk. Currency movements will impact on the value of your property when converted back to pounds and also the value of your UK pension when converted to local currency. For example, suppose you had bought a house in the US for $150,000 at an exchange rate of $1.5 to £1 (i.e. it cost you £100,000). If the dollar weakens to $2 to £1, the property is now only worth £75,000, despite the fact the property's dollar value is unchanged. Of course, currency movements can work in your favour, but it's foolish to ignore the potential impact they can have.

When buying a property it's essential to ensure you are actually getting what you want and that you don't pay over the odds. Always use a reputable solicitor/legal adviser to ensure the former (get certified translations of documents if you are not fluent in the local language) and beware of offers that appear too good to be true. There's no such thing as a free lunch. Property developers that throw in free 'legal costs', 'inspection trips' and other such tempting offers are likely clawing back the money elsewhere, so there's a chance you could be paying over the odds for the property itself. When buying off-plan you need to be comfortable that the builder will successfully complete the project and should avoid committing the majority of the payment until the property is completed to your satisfaction.

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