Three Gems in the Med
If you think the French property market is overpriced and the Spanish property market seems over-crowded (and you've checked out the new eastern European hotspots too), where can you go next in your search for a dream holiday home? Check out these three often overlooked gems in the Med.
Sicily
Sicily is as beautiful as the attractions of mainland Italy, but with the added bonus of property prices being about 20% cheaper. Better still, this quiet Italian island full of 17th-century palazzos and 18th-century farmhouses, is relatively undiscovered, which is an ideal combination for people who want a restoration project as well as a second home.
The most popular area to invest in is the Unesco World Heritage Site of the Noto Valley, in the southeast of the island. The area features several baroque towns where you can buy a small two-bedroom apartment from £40,000 or pay as much as £650,000 for a large restoration project with some land. New developments tend to be small-scale and concentrated in the resort areas of Trapani and Castellammare del Golfo in the north, where new homes with pools go for around £150,000.
Purchase tax for foreigners can be as high as 20%, and ancient land laws coupled with a baroque planning system does not encourage a speedy purchase. You will need to hire a Sicilian notary as well as a British solicitor.
Sardinia
The attractions of a 90-minute flight from the UK and a fantastic climate makes Sardinia, the second largest island in the Mediterranean, look good value for an investment. Until the no-frills budget airlines arrive, Sardinia will remain an island where life revolves around the summer season. Most developments line the coastal areas, with little in the way of rustic villas or much else inland. From November to March many shops and hotels simply close. So cheap, old, period property is thin on the ground, although new developments are reasonably priced, with studio apartments in Costa Paradiso starting at around £50,000 and two-bedroom homes around £120,000.
Waterfront property is more expensive of course, especially if it comes with outdoor space. For example, a detached villa in the fashionable northern resorts would set you back from about £300,000. Sardinia's regional government is considering imposing an annual luxury tax on holiday homes although most properties should fall far below the mooted minimum taxable size.
Cyprus
'Aphrodite's Isle' has attracted foreign buyers for years - 70% of whom are British. The beautiful island of Cyprus, located in the south-east of the Mediterranean, has scorching summer temperatures and a rich cultural history. The island draws on both European and Middle Eastern influences, which is partly the result of 9,000 years of periodic invasion and occupation. One occupier was the UK. Consequently Cyprus retains many aspects of British culture including a legal system modelled on our own and the use of the English language for legal documents. These facts together with prices around 30% lower than the Costa del Sol makes Cyprus a winner.
Larnaca and Paphos on the southern coast play host to the island's two airports. Unfortunately Larnaca took the high-rise option in the seventies, while Paphos's new developments are restricted to three storeys. As a result the coastline's beauty hasn't been ruined. One-bedroom apartments start about £60,000; three-bed villas overlooking the sea can be found for £500,000. Property is registered with The Land Registry, as in the UK, and inheritance tax has now been abolished.
Old favourites
British property island favourites of Mallorca and Minorca still have a reasonable market for buyers with big budgets. Prices, however, look rather steep in comparison to Sicily, Sardinia and Cyprus.
In Mallorca, good-quality coastal flats cost around £200,000, while detached villas start at around £650,000 and rise to as much as £7million. Minorca, on the other hand, is currently seeing a slow market for property under £700,000, although at the top end (£1m to £2m) it is quite buoyant.
Think carefully before securing other debts against your home.
Your home may be repossessed if you do not keep up repayments on your mortgage.
The overall cost for comparison is 7.1% APR. The actual rate available will depend upon your circumstances. Ask for a personalised illustration. There may be a fee for the mortgage advice. The precise amount will depend on your circumstances, but we estimate it will be 1.5% of the loan amount with a minimum fee of £500 added on to the loan.
Mayfair Consulting Limited is an Appointed Representative of The Mortgage Times Group Limited, 279 Tottenham Court Road, London , W1T 7RJ , which is authorised and regulated by the Financial Services Authority no. 303007.
