It emerged last week that TV stars Ant and Dec & Phillip Schofield will lose around £8m in deposits following the collapse of a villa resort in the Algarve. According to a report in The Daily Mail, Schofield is down £2m and the popular duo, Ant & Dec are at a loss of £3.1m each after the investment was sold to Brazilian financial firm, SRESPX.
The ongoing battle between the two parties serves as a timely reminder to any potential investors of the high risk associated with overseas investment. According to personal finance experts at money.co.uk, any Brits considering investing in a holiday home must look at both the benefits and the potential drawbacks of such a purchase, as well as being honest with themselves about the primary purpose of the investment.
James Andrews, personal finance expert at money.co.uk, said: “Many buyers are sucked in by the attraction of purchasing a low value property with a high potential rental value, but that doesn’t mean it’s going to make you a profit in the long run. Thanks to a combination of management fees, fluctuations in the exchange rate, plus random repairs and upkeep, there is no guarantee that your rental income will cover the mortgage payments, even if you have a regular supply of tenants.”