Self-build property is far more common in European countries than in the UK, accounting for almost half of new housing built. If you’re thinking of moving to continental Europe and building your own home, there are many considerations and regulations to think about and plan ahead for, just like in the UK. These include how you are going to make international payments and getting the right permissions through to foreign exchange differentials, and here we have put together a brief overview.
1. Local regulations and red tape
Much like construction in the UK, local building regulations are subject to change constantly. Regulations might not just vary based on country but can differ between two neighbouring plots, so never make assumptions. Getting it right will most likely require some local guidance to ensure that you don’t make costly mistakes: we’ve all heard the horror stories of Spanish properties being built illegally, for example. Be sure to conduct solid checks to make sure you find out if there are any local infrastructure plans. And don’t make any assumptions – double check that your builder has got all the permissions for example, as leaving any little detail out could push up the cost of – or even scupper – your entire self-build dream.
2. Finding the right help
The quality of the suppliers and contractors that you use will make all the difference. Seek out people that have done a similar thing, and talk to institutions that you can trust (such as a local bank) to get recommendations. It is worth seeking out a good local architect for example, who knows the locality and who might also be able to recommend independent local suppliers – and check out their previous work and speak to their clients before committing to anything. A final point is to have contracts – say between you and the builder – checked by a lawyer to ensure that there is nothing untoward which could leave your project high and dry.
3. Currency risk
If you are paying in sterling then the costs of a building your own home is subject to movements in exchange rates. One way that you can avoid costs increasing is to purchase and pay upfront for materials and labour, although in many instances this might not be what you want to do – or even an option. So another way to protect your costs is to use financial tools such as a forward contract which allows you to secure an exchange rate for up to two years. If you are comfortable with a rate today, but don’t need to settle costs until down the road, you can fix the prevailing rate, for example (forward contracts may require a deposit).
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Information correct at date of publication.