t seems that in recent Italian property prices then they
years much of the world are generally in the UK. The
went buy to let crazy. The Italian property prices seem to
push for this was after the be actually maintained by the
technology bubble burst, stocks previous generation who sometimes
crashed and investors looked purchase for their children,
elsewhere. supply large deposits and provide
payment guarantees to the bank.
But the differences in the rules Without these funds the house
and available deals vary greatly prices would be unsustainable.
from country to country. I have
experience with both the UK and But for now it seems the
Italian property markets and situation with the Italian
thought I would write about property market will remain.
Italian buy to lets and the There are 2 contributing factors
differences with the UK. to make this possible; 1) Birth
rates of 1.1 child per couple. In
Italian Money – Probably the best short there are less of the
place to start is to get an current generation for the
understanding of who is buying previous generation to pass money
the properties. In the UK too. 2) Italian Banking Reforms.
properties are largely bought Italian banks are gradually being
with the finances of the taken over by foreign banks and
purchaser. They will have saved banking rules are changing. Such
for a deposit, which may be as changes may make borrowing
low as 10%, and have obtained a easier.
mortgage in their own right.
Why They Buy? – In the UK market
Italian annual salaries are a people will buy properties in
much lower in comparison to relation to schools, where they
have obtained work and social around 10% depending on the
reasons. commune. The notaries fees will
also run into a few thousand as a
But the Italian purchase is general rule.
generally much more linked to
being close to the family. With For an Italian buy-to-let
the parents generally a property purchase I would
contributor or purchaser of the generally expect that you should
property they may often seek to be adding 12% for taxes and fees.
have their child as close as
possible. This means that it is Another factor then arises ‘Agent
often much more of an emotional Fees’. In the UK the vendor will
purchase for an Italian then pay an agent commission of 1.5%.
their UK counterpart and they But Italian agencies will charge
will be willing to pay a premium. 5%! As it is such a figure you
will often find vendors trying to
Buying the Property – Fees share this fee with the buyer.
In the UK you will face the
following fees; 1) Stamp Duty 0% Finding the Property
if below £120k, 1% between In the UK you have a wealth of
£120,001-£252,000 and 3% there sites on the internet that will
after. 2) Solicitors fees say show many photographs of the
£500-£1000. So your additional property and detailed
costs may only be 1%. descriptions with price. Also the
agencies are helpful and will
Now the Italian rules change send property details through the
things again. If the property you post as well as call you when new
are buying is a second home and ones arrive.
not your main residence then you
will be subject to taxes of Think again for the Italian
equivalent. Many Italians will telephone, gas, electricity and
try and sell their property water all require that each new
privately to avoid the 5% fees. tenant or owner pay a
So you will find properties in registration fee. The last one I
papers and adverts stuck to the have account of was 150 euros. In
side of buildings. Problem is the UK this registration is all
that you will very rarely see a for free as the supplier is
photo, price or rough address. I pleased to have your business.
have scanned page after page of
private ads without seeing You also need to be more careful
anything to differentiate between about what is included in the
them. Just 2 bed apartments in ‘a purchase if you believe you are
town’. buying a hospitable place as less
is included on an Italian
But I don’t feel the Italian purchase then in the UK. As
agencies are much better as they example a fitted kitchen is not
will often only have one photo of included in a standard Italian
the apartment and this will be purchase and might have been
from the outside and they again removed. Hence they may have
do not generally show prices. I taken the kitchen sink!
suppose the attitude is very
different and you as the buyer Mortgages
must do much more of the work In the UK a variety of mortgage
then you would expect in the UK. types exist that serve the
buy-to-let investor. 1st there
After Purchase Costs are actual buy-to-let mortgages
After buying the property you that look at the rental incomes
will then have some other costs rather then the investors income
that did not apply in the UK. when lending. Then you have the
Italian utility companies for interest only option, where only
the interest is repaid. But the perhaps some of these products
general mortgage culture in the will arrive in Italy too. But I
UK is different with people have no idea when
switching mortgages every few
years to obtain best rates and Renting
more personally suitable deals. Sorry but Italian agency fees for
For instance re-mortgaging to letting will generally be higher
release equity to buy more then the UK’s average of 10%. But
properties. this matter seems to vary from
agents to agents. You will also
Italian mortgage culture is have additional governmental fees
completely different. Interest for registering each letting
only and buy-to-let options do contract. Last one I saw was 150
not exist. Instead all mortgages euros, but you generally split
will consider your income and this with the tenant.
existing commitments and the
capital must be repaid with every You will also need to be more
instalment. Also an Italian selective with your tenants then
borrower will typically stick in the UK. The UK Assured
with the original mortgage as Short-hold Tenancy Act provides
most Italian mortgages restrict that you may apply to repossess
early redemption. the property if the tenant has
missed 2 months rent payments and
But Italian mortgages are this can take days to achieve. At
typically much lower then the UK. this point the tenant can be
On average about 2%, which evicted regardless.
sweetens the bitter pill.
Italian law is much slower and if
I would also predict that as they fall into a protected
Italian banking reforms continue category you may find it almost
impossible to evict them. annually whereas such issues are
the responsibility of the Italian
The only real bonus is that in properties tenant.
the UK the landlord is obliged to
carry out Gas Safety Inspections
About the Author:
The author works in Italian Translation project management at Axis Translations . He has worked internationally for most of his career as well as being a property developer and landlord.
Read more articles by:
Nigel Massey
Article Source: www.iSnare.com 
