According to the latest RICS/Ci Portuguese Housing Market Survey, agents in Portugal are reporting accelerating house price growth and higher rents. Whether you're buying a holiday home for personal use with a view to making capital gains over the course or your ownership, or a rental apartment to serve as an income-generating investment, market forces indicate that now is the time to spring into action. But has Brexit thrown a spanner in the works for those looking to obtain a Portuguese mortgage to finance their property?
Chris White, Founding Director of boutique estate agency Ideal Homes Portugal, thinks not. He comments,
"The UK's vote to leave the EU hasn't made it harder for Brits to get mortgages in Portugal. The banks here are still financing and the mortgage process has thus far been unaffected by the whole Brexit development. In fact, as the market here has picked up, the banks have become more lenient when it comes to their lending criteria, so if anything it's becoming easier for UK citizens to obtain Portuguese mortgages."
Ideal Homes Portugal's own mortgage offering is certainly striking a chord with buyers. The company has reported that around 50% of their clients currently are buying with mortgages, while the other 50% are making cash purchases. Many of those opting for loans to finance their purchases are investors looking to pick up one or more properties in the tourist mecca of the Algarve.
The Algarve has been a popular international tourist spot since Faro Airport opened in 1965. Since then, the airport has expanded along with the region's popularity, with a record 6.4 million passengers passing through it in 2015. That's compared to a resident population of just 451,006, according to Statistics Portugal. Add to those figures the 3 million or so domestic holidaymakers who head south to the Algarve and it's easy to see why the region has such a need for rental accommodation. In fact, the Algarve's population trebles over the summer months, to around 1.5 million people.
With low rates and 90% loan to value available through Ideal Homes Portugal, borrowing to fund the purchase of an investment property in Portugal is a simple and affordable process. Some of the most stunning new apartments that have piqued buyers' interest are those at Lagos Marina. Lagos is one of the most visited cities in the region and home to one of the Algarve's most beautiful beaches, Praia Dona Ana, where boatmen putter slowly around the cliffs, showing off the caves, rock formations and azure waters to family groups, while locals dive for squid and other seafood delights. There's also the enormous expanse of Meia Praia, with its surfers, windsurfers and trendy young things topping up their tans.
The eastern end of the Algarve is also becoming more popular with visitors and hence with property investors. The pretty fishing village of Cabanas de Tavira is packed with tourists over the summer months, along with a growing crowd of shoulder season visitors who aren't restricted to school holiday times. Both short-term and long-term rental apartments are increasingly sought after. A two bedroom home in a development just a couple of minutes' walk from the picturesque waterfront with its winding boardwalk is available from €139,000. With a gym, table tennis table and pool on-site, the development is perfect for family holidays, making it a popular choice with both investors and those buying a second home purely for personal use.
"It's a win-win situation at the moment," concludes Ideal Homes Portugal's Chris White. "The combination of 90% mortgages and low rates means that buyer's don't need a large deposit and the monthly repayments are really affordable. We're finding a lot of people are looking to Portugal in order to obtain an income from their holiday home as well as to use it for themselves."