The Caribbean is a hot spot for British house buyers
The islands are enjoying an investment renaissance, as Monica Woodley and Julian Knight report
Saturday 01 March 2014
Battling high winds and floods, you could be forgiven for thinking about deserting these shores and perhaps owning property in sunnier climbs. At this time of year for British buyers there is nothing quite like the Caribbean.
A classic destination for overseas property owners, it is enjoying something of a renaissance off the back of a strengthening pound against the US dollar. It means British cash goes much further these days in the Caribbean.
But the pound would have to go a lot further to buy property in some of the super luxury resorts that are springing up in the Caribbean for the first time since the financial crisis. Take Jumby Bay, a tiny island two miles off the coast of Antigua, for instance, which recently reopened after an 18-month closure to complete a full renovation where most of the resort rooms were entirely rebuilt. The result – stylish but comfortable suites (scattered around the resort rather than in one central building), each with their own patio, pool, luxurious outdoor bathrooms and bicycles to get around.
Development on the island is capped at 56 properties and the 40-room resort, as the owners are keen to maintain the large amounts of natural space. Andrew Hedley, managing director of Rosewood Jumby Bay, says most property owners come to Jumby as hotel guests and fall in love with the place, returning as guests until they find a property to purchase. The island has a unique ownership structure – owners of the properties own the island, with Rosewood contracted to run the hotel and maintain the resort, giving the feeling of joining an exclusive, low-key club. Prices for properties on the island range from US$7.5m-$30m (£4.5m-£18m) and have risen steadily, even during the global financial crisis. For those who buy on Jumby, it is common to use the resort’s rental scheme to let out their properties when not in use. Rental rates in high season begin at a staggering US$9,750 per night, up to $20,000 per night (on an all-inclusive basis) for the very largest properties.
Of course Jumby is one small part of Antigua and the prices are beyond all but the mega rich. The state of Antigua includes other islands including Barbuda, a flat coral island of 68 square miles famous for its pink sandy beaches. The island of Antigua itself is about one hundred square miles, with a coastline made up of many small harbours and coves. The locals lay claim to 365 beaches – one for each day of the year.
Most mainland properties are in the north and west of the island, concentrated on the coasts. The capital, St Johns, sits on the west coast while the airport is in the north. Popular areas include Jolly Harbour, Dickenson Bay and English Harbour in the south. David Vaughn, a consultant and Antigua specialist at estate agent Savills, says there is a good variety of properties in these areas, and building continues, with many new projects underway.
“The mainland market has been much more affected than Jumby Bay by the global economic slow down. Prices on Antigua have been down over the past seven years, with properties taking longer than usual to sell.” Prices on the mainland are significantly lower than on Jumby. Instead of Millions buyers are looking at the hundreds of thousands. For example, a two-bed villas in Jolly Harbour, with their own moorings, start at US$200,000. There are some apartments available but the market is mainly villas and houses, with houses on the beaches at Galley Bay, Jolly Beach, Dickenson Bay, Nonsuch Bay and Long Bay fetching about $2.5m.
Resale properties through estate agents such as Savills, Stanleys and Brookes and Co can often turn out to be the best bet for the more cost conscious, with one bed apartments starting at $200,000 and three bed villas available for $400,000-$500,000. If you prefer new builds – and Caribbean vegetation can be very harsh on building and concrete – then there are Villas and apartments available at the likes of Tamarind Hills resort starting at $425,000. The key to buying in the Caribbean, from a resale potential perspective, is that it is best to be located next to boat moorings, a golf course or a beautiful beach, one of these is okay, two good and three normally means good rentals and sustained value.
The buying process is relatively straightforward. Antigua is a former British colony and the buying process is in the main familiar. As conveyancing is similar, Mr Vaughn from Savills advises buyers to avoid using lawyers recommended by the seller or developer; have a full structural survey done; hold deposits with a reputable lawyers in escrow accounts and if buying a new build, “employ a government-certified engineer to ensure the property is constructed according to the plans before releasing any money”.
Buying at Jumby Bay is a bit more complicated than on the mainland because of its ownership structure and the property market is obviously much smaller, with fewer properties coming up for sale. But once a property is found, in order to get things moving, both sides sign a letter of intent and the buyer puts down a $25,000 refundable deposit. The buyer has 30 days from receipt of the Sales and Purchase Agreement (SPA) to review it and sign it whereupon a deposit is made of up to 10 per cent (if the SPA is not signed, the $25,000 is refunded and the property is placed back on the market). Closing usually takes place four to six weeks after signing, once the relevant licenses are granted. More generally, In Antigua, the standard buying fees are 5 per cent of the purchase price, the non-citizens fee is 2.5 per cent, and stamp duty and lawyers’ fees are 1-2 per cent. That is high by UK standards but lower than many destinations in the EU. After all, the Caribbean is a true getaway destination with just a hint of home from home about it.
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