During November and December 2011 there was a significant increase in interest for residential property in the Algarve region of Portugal according to Infinito Real.

In comparison with three years ago, the company say property prices have reduced by approximately 40-50%, with banks now more stringent with their lending criteria due to global economic uncertainty, but there are mortgages still available at up to 80% of the purchase price.

Stephen Anderson, managing director of Infinito Real, says that many potential buyers have little or no knowledge of the local market or associated finance requirements.

Anderson said: says “More often than not, we have to manage clients’ expectations which can be quite unrealistic. We have found that many clients coming over for viewings and they have very little finance to put down and arrive under the premise they will be able to secure a high loan-to-value mortgage, which are typically constrained to those borrowers that can prove a high income. Others, arrive with some €100,000 but over-estimated what they will be able to purchase, expecting to find sea-front apartments for that amount.”

Anderson continued: “Clients should certainly be looking to put down at least 30% to have some buying options here, and be able to demonstrate an income of at least £5,000 per month to be able to qualify for a 70% loan. There are a lot of factors the banks take into account now, so there is no straight forward calculation that says, if you make X then you qualify for Y.”