Strong Cyprus housing market attracts Britons

UK buyers still flock to the Med despite horror stories of land claims affecting purchases. Julian Knight reports

It's easy to see why Cyprus has been one of the most popular locations for Britons to have a holiday home over recent decades.

English is spoken widely across the island; the sun shines bright and warm right into November and beyond and the two major airports have regular flights to the UK, only four and a half hours away.

"People feel it's a real home away from home. They love the weather, of course, low crime, as well as the fact that English is spoken fluently everywhere and they even drive on the left," said Eileen Hardy, a director of Paphos-based estate agency Hardy Estates (hardyestatescyprus.com).

But there have been spoilers to this island idyll set in the shimmering eastern Mediterranean. Firstly, there was the legacy of the island's painful division between the Greek south and the Turkish north. Displaced Greek Cypriots have a claim on land – which has been upheld in the UK courts – in the north of the island which has been subsequently resold to British buyers. In one case, the British buyers has been forced off the land and out of the dream holiday villa they thought was theirs. Whatever the rights and wrongs of such situations, the property business on the whole island has suffered reputational damage.

"We don't have the same situation here in the south as in the north, but buyers have to be aware of certain land ownership issues," says Ms Hardy. "Every bit of land is registered – as a legacy of the British. But when you buy a new-build property in particular you can be waiting a long time – sometimes several years – to get your hands on the title deeds. The development has to be completed before the title deeds can be applied for. If the developer has mortgaged the land, then that has to be paid off before the deeds are available. In most cases, there's no problem but you have to do your homework."

Usually, the problem of title deeds can be avoided by buying a second-hand property rather than a new build, Ms Hardy says. However, even in this instance there are some homes which have been standing for 10 or 20 years yet still don't have a title deed.

"If you are considering buying property in Cyprus, the key is to get the correct legal advice. Fortunately, documents should be in English," said Rob Wilson, the overseas property director at Rightmove.co.uk. "Don't go with the lawyer the seller suggests or the developer – source your own. Check out the Association of International Property Professionals to find a suitable lawyer."

On top of such knotty legal problem came the credit crunch, subsequent global recession and the pound's crash against the euro which hit the buying power of all those Britons. This hit the Cypriot property market for six. "If you bought three or four years ago, you'd be very lucky to make your money back selling now," Ms Hardy said.

However, Cyprus is on the way back. Ms Hardy reports activity comfortably up on last year. Developers are building again in a still sparsely populated island. At a top-end development, Aphrodite Hills, near Paphos in the beautiful south-west coastal area of the island, the sales manager, Yiannos Panayides, says they have reported a return in buyers from the UK, making up 60 per cent of the total purchasers, with Russians the next biggest group making up 30 per cent of new home buyers.

The resort, owned by Lanitis Development and Marfin Laiki Bank, the second biggest bank in Cyprus, is selling 44 villas and apartments to be completed in 2012. The Alexander Heights has stunning sea views and nestles next to the resort's 18-hole PGA championship golf course and within a short walk of the on-site tennis academy. The villas all have pools, extra basement space, underfloor heating, smart home technology and landscaped gardens. Prices start at ¤1.09m (£925,000). Apartments have terraces or gardens and prices start at ¤598,500 for two bedrooms. Owners get a free two-year membership of the golf and tennis clubs, which can be transferred to guests. In addition, owners get a 10 per cent discount on the site shop and the wide range of site restaurants. The jewel in the crown of the resort is the spa with massage and facial treatments as well an extensive infinity pool. In 2008 it scooped the the European spa of the year award at the Professional Beauty awards. Lanitis's links to Marfin Laiki bank mean that financing a purchase can be relatively straightforward, with mortgage rates not too dissimilar to those in Britain. "Mortgages are available at a loan to value of 75 per cent at a euro base rate plus 3.75 per cent [equivalent to 4.75 per cent]. Most buyers take this option," Mr Panayides said.

However, elsewhere on the island financing may not be so clear cut. The reason? Those title deeds again. "The property may look perfect but you really have to check out the deeds situation, as without them, or the bank having a relationship with the developer, it may be difficult to get a home loan," Mr Panayides says.

Purchasing a property in Cyprus also comes with some tax nasties. An initial property transfer fee of 8 per cent is payable by purchasers – like stamp duty – and on resale there is 20 per cent capital gains tax to pay on profits (but with a generous tax-free allowance) as well as estate agency fees typically round the 5 per cent mark. But if you are looking for a year-round holiday destination to attract rental income, then Cyprus is well placed.

"We have sun most of the year, and on average in our resort villas we have 20 weeks a year full occupancy of rental villas. Many owners rent out in high season (May to October), earning the most cash and then stay there during other times with the weather fine deep into the year. You can understand why," Mr Panayides said.

News
The guide, since withdrawn, used illustrations and text to help people understand the court process (Getty)
newsMinistry of Justice gets law 'terribly wrong' in its guide to courts
News
Bobbi Kristina Brown with her mother Whitney Houston in 2011
people
News
Starting the day with a three-egg omelette could make people more charitable, according to new research
scienceFeed someone a big omelette, and they may give twice as much, thanks to a compound in the eggs
News
Top Gun actor Val Kilmer lost his small claims court battle in Van Nuys with the landlord of his Malibu mansion to get back his deposit after wallpapering over the kitchen cabinets
people
PROMOTED VIDEO
News
The actress Geraldine McEwan was perhaps best known for playing Agatha Christie's detective, Miss Marple (Rex)
peopleShe won a Bafta in 1991 for her role in Oranges Are Not The Only Fruit
News
newsPatrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad
News
Robert Fraser, aka Groovy Bob
peopleA new show honours Robert Fraser, one of the era's forgotten players
Life and Style
Torsten Sherwood's Noook is a simple construction toy for creating mini-architecture
tech
Sport
David Silva celebrates with Sergio Aguero after equalising against Chelsea
footballChelsea 1 Manchester City 1
News
i100
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Software Development Manager

    £40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

    Ashdown Group: Product Manager - (Product Marketing, Financial Services)

    £30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

    Recruitment Genius: Compliance Assistant

    £13000 per annum: Recruitment Genius: This Pension Specialist was established ...

    Ashdown Group: Market Research Executive

    £23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

    Day In a Page

    As in 1942, Germany must show restraint over Greece

    As in 1942, Germany must show restraint over Greece

    Mussolini tried to warn his ally of the danger of bringing the country to its knees. So should we, says Patrick Cockburn
    Britain's widening poverty gap should be causing outrage at the start of the election campaign

    The short stroll that should be our walk of shame

    Courting the global elite has failed to benefit Britain, as the vast disparity in wealth on display in the capital shows
    Homeless Veterans appeal: The rise of the working poor: when having a job cannot prevent poverty

    Homeless Veterans appeal

    The rise of the working poor: when having a job cannot prevent poverty
    Prince Charles the saviour of the nation? A new book highlights concerns about how political he will be when he eventually becomes king

    Prince Charles the saviour of the nation?

    A new book highlights concerns about how political he will be when he eventually becomes king
    How books can defeat Isis: Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad

    How books can defeat Isis

    Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad
    Judith Hackitt: The myths of elf 'n' safety

    Judith Hackitt: The myths of elf 'n' safety

    She may be in charge of minimising our risks of injury, but the chair of the Health and Safety Executive still wants children to be able to hurt themselves
    The open loathing between Barack Obama and Benjamin Netanyahu just got worse

    The open loathing between Obama and Netanyahu just got worse

    The Israeli PM's relationship with the Obama has always been chilly, but going over the President's head on Iran will do him no favours, says Rupert Cornwell
    French chefs get 'le huff' as nation slips down global cuisine rankings

    French chefs get 'le huff' as nation slips down global cuisine rankings

    Fury at British best restaurants survey sees French magazine produce a rival list
    Star choreographer Matthew Bourne gives young carers a chance to perform at Sadler's Wells

    Young carers to make dance debut

    What happened when superstar choreographer Matthew Bourne encouraged 27 teenage carers to think about themselves for once?
    Design Council's 70th anniversary: Four of the most intriguing prototypes from Ones to Watch

    Design Council's 70th anniversary

    Four of the most intriguing prototypes from Ones to Watch
    Dame Harriet Walter: The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment

    Dame Harriet Walter interview

    The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment
    Art should not be a slave to the ideas driving it

    Art should not be a slave to the ideas driving it

    Critics of Tom Stoppard's new play seem to agree that cerebral can never trump character, says DJ Taylor
    Bill Granger recipes: Our chef's winter salads will make you feel energised through February

    Bill Granger's winter salads

    Salads aren't just a bit on the side, says our chef - their crunch, colour and natural goodness are perfect for a midwinter pick-me-up
    England vs Wales: Cool head George Ford ready to put out dragon fire

    George Ford: Cool head ready to put out dragon fire

    No 10’s calmness under pressure will be key for England in Cardiff
    Michael Calvin: Time for Old Firm to put aside bigotry and forge new links

    Michael Calvin's Last Word

    Time for Old Firm to put aside bigotry and forge new links