Buying, selling or owning luxury property in your own country is something that is not done lightly. Such a significant financial investment requires planning and research if the final purchase is to meet your needs and to be acquired with the minimum number of problems. Familiarity with the buying and selling process in your own country automatically helps to eliminate some problems, particularly if you are used to this kind of investment.

However, buying property in another country where you are not familiar with the laws, customs and culture requires more background research whether this purchase is your first large investment in Europe and particularly if this is your first large investment, period. Whether you choose to buy your property through your company, or money manager or as an individual it is useful to be aware of what the process involves. Knowing where and how your money will be invested, the legal and practical issues involved, understanding the small print and the details are obviously part of sound financial planning and execution even if you involve other professionals in the process. However, cultural differences are potentially overlooked as you get caught up in the excitement of purchasing your dream chateau or your conference centre on a sprawling estate.

The problem lies in the historic nature of mortgage lending which varies considerably in the US from the standard model used across Europe. In the US it is commonplace to take out a mortgage with a twenty-five year fixed rate at the time of purchase, rather than rely on the fluctuating standard variable rate mortgage that is more commonplace in the UK and across Europe.

Maybe the European Union is too diverse an economy and it is this, that is holding back the E.C.B. from action. It has always been asserted that the lack of mobility of labour in the E.U. could be a source of keeping the economies of the members on different inflationary paths, making it difficult for the central bank to act decisively on interest rate policy when by doing so, one members economy may benefit to the detriment of another. By doing nothing however, the ECB stand the risk of pushing the property sectors in many countries into decline. It can already be seen in markets such as Spain, where any fresh impetus from overseas buyers due to recent falls in property prices, has been extinguished by the strengthening Euro against the pound. As British buyers make up over 65% of this holiday property market, the nullification of any price adjustments has dampened what was already a pretty ‘wet’market.