Former journalist Kevin Mochrie and financial services administrator Helen, both aged 58 and from Staffordshire, took early retirement to make their dream move to Portugal. Here Kevin shares their buying story and some tips about how to do it the right way.
We’d finally managed it and after years of dreaming, we were standing in our new home in Portugal… even if our furniture wasn’t due to arrive for another week.
Having holidayed in the Algarve for more than 20 years we’d often discussed making a permanent move. We loved the people and the climate and knew the area. Our mortgage was paid, our daughter had left home, our careers were winding down and we were looking forward to early retirement.
It was Brexit that finally pushed us into action. With the uncertainty around the UK’s future outside the European Union, it seemed now or never. While still EU citizens it was easier for us to buy property in Portugal, move our money and establish residency. After Brexit, well, everyone was uncertain and no one we asked could advise us on what the new rules might look like.
During our holidays we had researched the property market in Portugal, using villas we stayed in as comparisons: what was good or bad about their layouts, facilities and location? Then checking in estate agent offices to get an idea of local prices.
We had also attended A Place in the Sun Live exhibitions, watched the TV show and read the magazine to identify pitfalls and opportunities, which is how we found out about the non-habitual residency scheme – the government-backed programme that offers a low or zero-tax regime for new residents in Portugal.
Now our search was for real and the No 1 issue was: this would be our home, not a holiday home, as we intended selling up in the UK. So, while we dreamt of finding the perfect home, we also needed to keep “boring” practicalities in mind, such as storage, distance to local shops and amenities and even broadband access.
We spent evenings poring over websites to screen out properties that didn’t fit our criteria and compiling a list of “possibles”. But there’s nothing to rival seeing properties “in the flesh”. While some companies offer viewing trips to Portugal with discounted prices on flights and accommodation, we preferred to arrange our own so that we could view properties with different agents and see properties in winter, not just summer.
Our viewings brought some strange experiences: houses that had doorways barely five feet high; guest annexes still smelling of the bunch of teenage lads who had partied there for the weekend; properties with mysterious half-finished buildings and no planning permission; kitchens where grease-ridden pans and dishes had been left unwashed for months; and even properties we couldn’t get inside because the owners had given the agent the wrong keys and were now back in Germany, the Netherlands and even Canada.
Pretty quickly we saw that we couldn’t find the home we wanted on our budget, even though our search area was away from the Golden Triangle (the central Algarve area where property prices tend to be higher) and north of the N125, the highway that crosses the Algarve (coastal areas south of it tend to be more expensive too).
It was a challenge that will be familiar to many readers: change the wish list, change location, or change the budget? Fortunately, we could change the budget.
The A Place in the Sun Live! exhibitions provided us with contacts for real estate agents, financial advisers and currency exchange experts, which gave us a list of things to do before we even made an offer on a property.
We used our viewing trips to open a Portuguese bank account, get an all-important fiscal number (needed for everything in Portugal), find a Rics surveyor and engage a good solicitor who spoke English well to guide us through the buying process in Portugal.
Download our free guide to buying a property in Portugal
We’d bought and sold five houses in the UK but the system in Portugal is very different and has penalties of 10 per cent of the price for buyers (or vendors) who drop out after an offer has been accepted, so mistakes can be costly.
Our lawyer also warned us of real estate agents who ask for up-front deposits which are not always returned. We always took care of buying a new home in the UK and were even more cautious buying abroad, so we were surprised to see people who’d purchased without even a basic survey.
Our move always had Brexit in the background and the pound/euro exchange rate was extremely volatile.
We heard of people who suddenly needed to find another £10,000 when the exchange rate dropped, which put their purchase in doubt. To get certainty on the budget and limit our exposure to sudden changes we planned to change our money to euros in advance.
So when our adviser, who watched the exchange rate closely, alerted us to a sudden spike upwards after some positive news, we were able to buy €20,000 more than we would have done days either side.
On our viewings, two properties stood out. Both were in our preferred area, both had guest annexes, good-sized plots and large swimming pools. We also visited the houses at different times of day and during winter. There were pros and cons to each, so we needed to ensure our heads ruled our hearts.
The four-bedroom, modern house had been recently refurbished so we wouldn’t need to spend on high-cost items such as windows, bathrooms and kitchens
Although we knew it would need some repairs to the pool and more shade for pasty Brits to shelter under, this meant we could push up our budget and our offer of €545,000 was accepted.
The house was private but not isolated and just a short walk from the town, with great views over the hills and even a glimpse of the sea on a clear day. Importantly for us, it also had a one-bedroom guest cottage – the 100-year-old original house – so friends and family could visit and be independent.
Many real estate agents told us that they couldn’t remember a busier time for sales and cited Brexit as part of the reason. This had an interesting knock-on effect as people spruced up their new homes and it was hard to find any tradesmen or suppliers with the capacity to take on new work. It took us more than two months just to have new curtains fitted.
So did we get it right? Well, mostly. We should have opted for a full drains survey as the property had been empty for three years. We found out there was a problem when sewage started coming back up the shower outlets. We still shudder about that.
Key lessons we learnt:
- Seek reputable financial advice and plan early
- Do your research “on the ground” with fact-finding trips
- Find an English-speaking Portuguese lawyer
- Protect your budget against volatile interest rates by using a foreign currency broker
- Be realistic about what you can buy for your budget and stick to your criteria
- Be clear whether you want a full-time home or a holiday home; how you use it will differ
- The location of the property on the plot is as important as plot size as far as sun exposure and views are concerned
- Get a full survey, including drains
- Don’t be seduced by sunshine: check out the property in winter and ensure that next door isn’t “rental party central”