More than a million Britons will buy a home overseas this year. In Cyprus eight out of ten new homes built will be sold to UK residents.

The overseas property market is booming because of perceived value, improved travel, and the increased ability to work from home. Moving abroad can be a dream come true - but there are serious pitfalls to avoid.

Finance

Many buyers choose to remortgage their UK home finance the overseas purchase. It makes sense from a language point of view; all the documentation will be in English and the financial safeguards that apply in UK law can be an advantage.

And it generally allows you to borrow up to 90 per cent of your existing main home's value, (as long as the total does not exceed 3.5 times an individual’s income or 2.5 times a couple's joint income.)

• Don’t take the risk of using cash – that means you won’t have anyone (banks or building societies) making checks on your behalf, and it means you may have little chance of getting your money back if anything goes wrong. If you do decide to splash the cash, you should get independent legal advice from a respected local solicitor - and make sure you get a full survey done on the property.

You can also take out a mortgage overseas and some of the biggest UK finance houses (Abbey, Halifax and others) have now established branches abroad in order to satisfy this market. It may mean you need to put down a larger deposit and you will be lent significantly less than you might borrow in Britain.

Using a British bank with an overseas office can be enormously helpful when you have to pay local utility bills and taxes. They also have local contacts and can recommend approved professionals to help you.

Choosing between a UK or overseas mortgage can also be influenced by predictions of how interest rates will fare. If you borrow in France, for example, then you will be bound to French interest rates.

• Even if you think you are going to make a lot of money in rental income from the property, it will cut no ice with the lender and you cannot borrow on the strength of that predicted income.
  
  
• If you do make money renting out the property you will have to pay tax on it. If that money is transferred back to the UK you will pay UK tax, otherwise you pay the tax rates of the country in which the property lies. Get independent tax advice.
  
  
• It can be more expensive to buy a new home in France than an old property because of local tax laws. There is no VAT on old homes – but there will still be taxes.
  
  
• Add at least 10 per cent on top of the purchase price to pay for solicitors and surveys, and be aware that there will also be variable local taxes on your purchase.

Buyer beware

• Don't make an impulse buy while you are on holiday.
  
  
• Make sure you have thoroughly investigated the surrounding area - and preferably go at different times of the year. Driving rain and cold winds can make a big difference to first impressions of sun and sand.
  
  
• Use official channels to move all payments - without proper records you will not be able to claim insurance or refunds if you do not have reliable records and you may have difficulty moving your money back to Britain.
  
  
• Don’t pay up front for a home that is not built yet. Any reputable developer will accept that payments should be made in stages as the building goes up. And make sure that you have agreed the final price and that the cost doesn’t go up during the building process.
  
  
• Make sure the land on which your new property sits is paid for. Some developers borrow money against the value of the land and if they go bust, then the banks step in. And it has happened in the past that local councils have snapped up the gardens of new owners to build roads.
  
  
• If you are planning on renting out your property, make sure that you are legally allowed to. Some local laws prevent this. And don’t forget that you will have to comply with local health and safety regulations.
  
  
• If you are buying a run-down property and plan major building works or conversions, be absolutely diligent about checking the planning laws. It is not unknown for impulse buyers to find they have bought the equivalent of a Grade 1 listed building and can’t make any changes at all. That rural barn may in fact be exactly that – a farm building with absolutely no permissions for conversion to a home.
  
  
• Buying an older home may bring more burdens that you anticipated. Some buyers have found they have inherited the debts of the former owner.
  
  
• Don’t just use an estate agent; use a lawyer. Lawyers have greater professional responsibility and are more likely to be thorough in their research.
  
  
• If you buy on a golf course, be prepared for service charges to rise dramatically the more popular or prestigious the location becomes.
  
  
• Remember, you will be away from friends and family. If you cannot speak the language you may end up feeling isolated.
  
  
• Don’t buy unless you have the finance already in place. If you don’t have the money to hand you could easily lose your entire deposit.
  
  
• Don’t be tempted to cut corners, take risks or assume that everything will be fine. Sunshine makes some buyers easy-going and the end result can be disastrous.
  
  
• Don’t sign ANYTHING unless you understand it fully.