Hello...

How are you doing? Gosh…it seems like it’s been ages since I wrote my last ‘monthly’ newsletter. I’ve done all sorts of things – I saw The Police at Twickenham Stadium (they were OUTSTANDING), I’ve decided to take up Golf (call me Tiger Brown now), and I’ve been going crazy on the movies – ‘She’s Knocked Up,’ ‘Die Hard 4’ ‘Borne Whatever…’

If you want an absolutely great laugh, go see ‘She’s Knocked Up…’ I cannot recommend this movie enough.

Okay…On to Cyprus.

Well – there’s quite a bit going on with the lending industry in Sunny Cyprus – and across the world. Northern Rock was in the news this morning (in the UK) announcing that they had to borrow funds from the Bank of England to stay afloat.

And in Cyprus I’ve been receiving daily updates from my IFA contact regarding new directives from the Bank of Cyprus. If you haven’t heard yet, there are RUMOURS that all first time buyers will need to pay a 40% deposit unless they are moving to Cyprus to become residents and will be allowed a loan to value of 70% or, in other words, buyers will need pay a 30% deposit.

EVERYONE seems to think that this will NOT happen. So I’m not writing this to freak you out or anything…I’m just writing to let you know there’s a few issues.

My IFA contact sent this to me late last night:

It seems that the Central Bank has issued their directive today, only shortly after I spoke with you.

They have decided that any development that has received planning permission before the 22nd August will be agreed for 20% loan for first property in Cyprus. If the development has not received planning permission but the client has signed and lodged their contract of sale by the 22nd October they should also qualify for 20% first loan figure.

I have only received this verbally this afternoon as the banks were closed by the time it was issued so I await further clarification tomorrow when I see the document itself and I am sure that, as in the past, these changes will be interpreted different ways by different banks however it is clear that if building has started your loan will be safe.

The key is to ensure your readers is that they should move quickly with their contracts and deposits. I think we will see some softening of the situation for other properties over the next few weeks as well so will keep you posted.

I also received the following from one of my estate agency buddies:

Had a meeting with my bank manager on the way in this morning and there will be a big conference meeting with regards this issue I do not know when.

Kim even the bank managers are confused with this situation as the central bank gave this order-Memo to all Cyprus Banks one day back in July with no prior notice and no planning as my bank manager strongly believes there should be a 6month if not a year notice for such a brave decision, however Laiki Bank (second biggest bank here) has been bought by Marfin bank which is not a Cypriot bank but middle east bank, so in actual fact Marfin-Laiki Bank claims to be not considered under the Cyprus central bank’s laws and still want to be able to offer the 20% contribution to their clients.

I also had a call from a developer yesterday that claims his bank is now able to offer 80% loan on all of his properties.

So…That’s all I know for now on the mortgage situation…I will keep you posted.

Otherwise, it looks like I might be going to Cyprus in a couple weeks. I have not booked yet, but I think I'm going to go from the 4th to the 11th of October. Will you be there? If so, let's meet for a glass of wine! Just let me know ASAP so I can keep my diary clear.

Okay...in this issue I have quite a few things on protecting yourself...and your Cyprus property. The information is a bit 'dry,' but is very important, so please read on...

Keep reading…

Big Smiles,

Kim Brown
Cyprus Buying Guide
The Overseas Guides Company Ltd.
Kim@CyprusBuyingGuide.com

All fired up...

A cautionary tale about getting your house insured…

Just a few days ago I received an email from Dave and Yvonne, who are Greece Buying Guide readers. They had been told by the person who sold them their home (and estate agent) on Evia that “most people don’t bother with insurance because the buildings are so solid (earthquake proof and little that can burn) that the chance of being damaged is so slight – and we wouldn’t be putting expensive contents in either.”

They asked me what I thought. My immediate response was - would you leave your UK house uninsured? Especially in a country that is prone to fires and earthquakes - what the heck are they thinking? I went on to say that Greece has experienced the worst fires in their history, brought about either by arson or the intense heat...reports vary, but the result would be the same for homes in the path of the fires. As it happens, Evia is one of the worst hit of the islands, making this even more pertinent.

Luckily Cyprus hasn't had too many fires this year...but they did have several that came very close to the properties up above Paphos.

I know that buyers don't want to cause offence, but it's much more important to make sure that all your bases are covered rather than politely agreeing with your estate agent/developer. Just because agents say that something isn't necessary or that 'it isn't done that way here,' doesn't mean that you should necessarily believe them!

A Greece Buying Guide reader, Adrian, happened to be on Kefalonia during the recent fires and had a hair-raising tale to tell.

He woke up one night around midnight as he could smell smoke and opened the bathroom window - it was really hot. He then went outside to look. The fire was actually some distance away but he said that it was really quite a sight at night. The neighbouring island of Zante had been on fire for a few days and could be seen in the distance, glowing red and orange. There were fire spotters flying around and a helicopter flew by to pick up water from the sea and then returned to the fire to disgorge the water. Scary stuff Adrian – thanks for this account.

It does prove that this could happen anywhere and at any time. All this not to scare you – fires can break out anywhere. But I think it does rather prove the value of really good insurance – insurance that specifies fires incidentally.

You will also need to make sure that you always specify 'Fire from the Forest' otherwise you are only insured for fires started by electrical faults, garden rubbish fires and fires started by your own hearthside fire. If you are near olive trees, you will need to specify this too and costs may rise as these trees are especially flammable.

My co-worker Karen has an article below about insurance and how to get overseas property insurance, so PLEASE look into this. It's YOUR money...and you need to protect it!

Insuring yourself against Currency Movements

by Smart Currency’s Charles Purdy.

What does insurance give you? It should ensure that you are left in no worse position after an event such as a fire than before it. It will [hopefully] remove the stress and strain of having to worry both before and after [if you are unlucky] of a traumatic event such as a fire actually happening.

We try and achieve the same thing for our clients at Smart. One of the ways we do this is to give better rates than the banks which will save you some money which can be used to buy some white goods or perhaps even a better property. We also save hidden costs such as receiving costs. The Spanish banks can charge up to 0.5% for receiving you money. Thank you Spanish banks! Cypriot banks are known to charge anywhere from £5 to £200.

However one of the major savings is making sure that you don’t have to find an extra £2,000 or £5,000 or whatever when you come to buy your €250,000. You may have budgeted an exchange rate of €1.472/£1 but on the day you need the funds the rate is €1.46/£1. Ouch.

What will hurt even more is that they may have been able to “insure” a rate of 1.473 a month earlier. You can do this through an insurance policy known as a forward contract. For a deposit of up to 10% you could have secured the exchange rate of €1.473/£1 and removed all the worry and stress and strain of finding that extra money. In fact you have saved against your budget. Yippee.

The best insurance policy I ever wrote saved a client over £20,000. As he was emigrating to France this paid for a lot of those hidden extras and meant he started his new life in France on a happy note.

'It's better to be safe than sorry!' by Karen Gilbert

Ok, so you’ve got your dream property overseas…. Now how do you ensure that you protect your investment and keep the dream just how you want it?

Property Insurance isn’t one of the first things which might cross your mind when dreaming of that place in the sun. In fact, it is far from the most exciting consideration - BUT it is one of the most important. Insuring your property correctly will ensure that you protect the future of your investment.

Overseas Property Insurance isn’t just limited to the bricks, mortar and contents of your property, but rather can extend to insuring your rental income and also to insuring against the threat of legal action should any guests have an accident whilst on your property.

This might not make the most enjoyable reading but - as the saying goes -

‘It’s far better to be safe than sorry!’

In fact, I did quite a bit of research before I wrote this piece and I found some unbelievable facts…

• Over 20% of overseas property buyers viewed security of their holiday home as a top concern – above all else.

• Almost 70% of overseas buyers hoped to rent their property out to other holiday makers - BUT just 5 per cent were concerned at the risk of legal action in the face of any accidents by guests on their property.

This makes for a worrying read as I begin to consider the risk which some overseas property owners may leave themselves open to… losing everything or even going to prison…

A basic introduction to insurance…

If you have a mortgage on your property, you will find that buildings insurance will be mandatory. You lender will insist on being covered in the event of flood, storm or any other eventuality* which means that a re-build is necessary. *It is worth noting here that you should ensure that your policy covers you for earthquakes or similar – as required by the country of purchase. This cover does not always come as standard in insurance policies.

The guide to cover is based on the cost of re-building your property, excluding land. This cost can be assessed by your insurer, a surveyor or a local architect who could provide you with an estimate.

Contents insurance will cover the cost of replacing any items on your property. If the property is your primary residence, the value of its contents may be higher than if it is purely for holiday home use, with your primary residence elsewhere. Also, bear in mind the need for accidental damage cover if other people will be using the property.

As I mentioned earlier, liability insurance is so important for rental properties. If an accident happens to someone who is staying in your property, you could be sued.

Also consider employer’s liability insurance if you intend to have anyone assist you in managing the property, gardening or cleaning.

For buy to let properties, it is possible to insure your rental income. This is typical of property owners whose majority income is linked to their property portfolio and whose tenants are more permanent. Rental income insurance protects the landlord in the event of any periods when potential rental income may be unavoidably lost. Flood damage and unavoidable building works might be two such examples.

If you plan to rent your property to longer term tenants you may also need to insure to cover legal expenses. This could then help to cover any associated legal costs if you were to have a bad tenant who refuses to pay or who you might need to evict.

It’s important that your insurance policy covers you and your property for all eventualities. You may find that a locally bought policy could leave some gaps in the cover. This is where it is extremely important to compare the cover between companies - and between UK based insurers and the cover offered by local policies.

If your property will be vacant for a period of time each year, make sure that your insurance policy covers for this.

Remember that unlike your home in the UK, you might not be able to travel to your overseas property immediately in the event of a problem. Think through what you might do in the event of a burst water pipe in your property abroad. Do you have the contact details of a reputable local plumber? Does someone in the local area hold spare keys to your property?

If your property is in a neighbourhood with other holiday homes, get to know the neighbours and see what they do when they’re away from their property. Do they have a rental management company or does a friend or neighbour look in on the property for them? Get to know your neighbours and see how you can help one another.

With regard to insurance, make sure that all policy wording can be provided for you in English and that the claims and enquiries support teams / phone lines are available in English too. This way you can ensure that in the case of an emergency you can resolve matters swiftly and avoid any language complications.

If you’re renting the property to holiday makers, look around the property carefully and take note of any potential accident spots. If there is a hidden step which people may trip on, or a low ceiling which people might walk into, then you may like to make these more visible to try and reduce the chance of accidents.

Above all, adequate property insurance will give you peace of mind in knowing that your investment is protected. I hope that this hasn’t put you off buying property abroad but has rather given you an insight into the world of overseas property insurance and an idea what you can do to prepare for any eventuality.

As ever, with such a specialist subject, I would always suggest that you seek the advice of an expert in overseas property insurance as soon as you know you are going to buy property abroad. An insurance expert will be able to provide you with detailed information on insurance in the country of your property purchase, advising of the necessary policy details and any restrictions. They will also be able to provide you with a quote specific to you and your property.

If you would like to speak with an expert in overseas property insurance, please just let me know and I will gladly arrange for an expert to contact you directly.

http://hb2.hbinsurance.co.uk/holiday_homes/quote.asp?agent=OVGU

EHIC - European Health Insurance Card

EHIC - European Health Insurance Card (Replaces E111 paper from 2006 onwards)

From 2006, the E111 form is no longer valid. If you are travelling to EU countries you will now be required to be in possession of an EHIC Card - European Health Insurance Card.

Highlights:
- The EHIC replaces the E111
- Covers basic healthcare while travelling in Europe
- One card needed for each family member
- Not for planned treatment, only emergency
- Travel Insurance still needed

The new card allows EU nationals to obtain the same level of healthcare as a local resident in a member country when travelling.

The scheme covers short-term trips around Europe and Switzerland. It only covers basic national healthcare as received by local residents. This scheme will not cover those living permanently outside the UK. It will cover the cardholder in member countries of the European Economic Area and Switzerland, is valid for 5 years and only available to UK residents.

One new card will no longer cover the whole family as the old paper system did. Each person in the family will need a separate insurance card. The new card provides the user with essential care needed for the length of stay, which means that in cases of travel with existing/chronic medical conditions non-emergency care will also be provided. It does not cover already planned treatment in home country.

The EHIC also covers all aspects of care originally provided under the paper system, along with necessary treatment for travellers with existing conditions. The card will not cover treatment a patient is awaiting for in his or her own country, nor treatment that can wait until return home.
It is important to remember that treatment covered will be the same as that received by locals, which can vary among EU member states. In France treatment is sometimes better than the level of the NHS!

The EHIC is available free of charge through the Department of Health website at: http://www.dh.gov.uk/travellers or http://www.ehic.or.uk or by telephoning 0845 606 2030.
You can also obtain the EHIC by completing the Department of Health leaflet “Health Advice for Travellers” (HAFT). This is available through most UK Post Offices or by telephoning 08701 555 455.

For EHIC Enquiries you can also write to PO Box 1114.Newcastle upon Tyne, NE99 2TL

Delivery date:
Online - 7 days
Phone - 10 days
Post Office- 21 days

Also called the EU Medical Card, over 8 million people in the UK have already received the new EHIC card - it looks just like a small plastic ID card and gives details such as your name, date of birth and National Insurance number.

On receipt of your new card please check it: errors have been known to happen and that could cause major problems if you need to use your EHIC in a medical emergency abroad - you could be refused treatment if your card details don't match up with your passport details.

If your card details are wrong, return it immediately. Allow 7 days for the new one to arrive.
If you or any of your dependants are suddenly taken ill or have an accident during your visit to any of these countries, free or reduced-cost necessary treatment is available - in most cases on production of a valid EU Health Insurance Card.

While the card will cover emergency treatment, it is essential that all travellers to Europe still obtain travel insurance. The card will not cover any transportation home (repatriation) or expenses for relatives, accommodation costs etc. should an emergency occur. Please remember that the EHIC Card form is NOT a substitute for comprehensive travel health insurance. For instance if you and your family are involved in a car crash, it won't cover you for repatriation home for treatment at a local hospital. Only comprehensive travel health insurance cover, which you'll have to take out privately, would cover you for that.

If you're working in the UK but paying social security contributions to another EEA country or Switzerland, you should get your EHIC from the institution to which you pay your contributions. Not all UK residents are covered in Denmark, Iceland, Leichtenstein, Norway or Switzerland - the leaflet 'Health Advice for Travellers' gives more information and is available from Post Offices or the Department of Health website.

For detailed guidance, please check the section “Who is eligible for an EHIC?” in either the HAFT leaflet or on the DH website.

http://www.travelhealth.co.uk/advice/ehic.htm

Which insurance to choose?

The OGC team has tested out many insurance companies. Some were good and some were not so good. Two insurance companies stood out from our research.

Columbus Direct

Columbus Direct is a well known travel insurance specialist which has been going for about 20 years. The company sells direct to the public and this effectively cuts the “middle man” and saves clients up to 60% in commissions charged by other providers.
The company has a wide variety of travel insurance options from single, annual insurance, backpacker, ski trip, over 64, motor, home, cruises, pet and lots more.

To get your quote, go www.columbusdirect.com and select the kind of insurance you need. The web site will display a simple form with a few fields to fill in such as your residency, destination, and dates of travel.

Click ‘Submit’ and you get an instant quote and additional insurance you can add to your package such as additional sports, baggage insurance and so forth. It is very easy and you don’t have to enter any personal information before getting a quote!

Once you are happy with the quote you just simply fill in your contact details and pay. You can use Visa, master Card, Maestro or American Express. The policy is then emailed and sent in the post.

Ironically, as I was writing I actually received great feedback on Columbus Direct from one of our readers:

"Hi there,

I have just booked holiday insurance for my elderly family and friends from your recommendation on Columbus Direct I got a very good price very pleased

Thanking You Mrs. J. B."

Check out Columbus Direct

Direct Line Travel Insurance

Direct Line Travel Insurance is the other company I tested out. As with Columbus Direct, Direct Line offer great similar travel insurance options, however I discovered two issues.

I had to enter my contact details and address prior to getting quote. At this stage, I didn’t even know if I would be happy with the quote so I didn’t see a good reason as to spending all the time filling in my name, contact details and address.

Issue # 2 the price! I entered my details onto both sites, traveling to Cyprus from 15th October till 21st October 2007. Columbus direct quoted me just under £ 10 and Direct Line Travel Insurance £ 20. Big difference!

Direct line is currently offering a 20% discount, so I'd check them both out...

When I did my search, the price made my choice clear! Can you guess which one I picked? ? The key with travel insurance is to shop around. In most cases it only takes a few minutes to get a quote – we are continuously reviewing and adding resources to our services page. Before you get insurance, check our reviews and get quotes on all recommended links.

That's All She Wrote

I hope the information provided has been helpful. Me and the other Overseas Guides Company girlies work our butts off to bring readers valuable and hopefully interesting information. I know that we can't spell very well and our grammer isn't perfect - but the message should be of value!

Please keep in mind that we sell an incredible Cyprus Buying Guide, go to:

http://www.CyprusBuyingGuide.com/guide.htm

Further, if you want help finding a property in Cyprus, I've been to most developments and I have connections with some fantastic LEGAL estate agents. Please fill out my property form and I'll give you a call to discuss, go to:

http://www.cyprusbuyingguide.com/requirementsform.htm

Have an exellent day, week and month!

Big smiles,

Kim
Cyprus Buying Guide
The Overseas Guides Company Limited.
mailto:Kim@OverseasGuidesCompany.com