Bargain-hunting Britons are jumping on to the Spanish property ladder as house prices continue to fall, says Clare Nessling, director at Conti, an overseas mortgage specialist.
“If you believed everything you read, you would avoid the Spanish property market like the plague. But it appears that foreign investment in the country is growing steadily with Britons leading the way. So what’s the real story?
“There are many reasons why it’s actually a great time to buy a Spanish home. Bargain prices for a start. The Swiss bank UBS estimates that Spanish house prices have plummeted by up to 38% since the peak of the market, and that they’ve got another 8% to go before bottoming out.
“This, together with a concerted effort being made by regional estate agents and tourism boards to improve Spain’s tarnished image, is leading to high hopes that increased foreign investment will eventually help to revive the country’s property market.
“The market should also be bolstered when a new law granting automatic residency to non-EU nationals buying property worth at least €500,000 is passed.
“According to the Bank of Spain and the Real Estate Registry’s annual report, foreign investment in Spanish property increased by 17% in 2012 – the highest level since 2004, and British buyers accounted for more than 16% of the foreign market. In total, €5.54bn was spent by foreign nationals last year compared with €4.7bn in 2011.
“The Spanish property market has experienced a very turbulent few years, but it still accounts for around a quarter of the enquiries we receive, and was actually the country we received most enquiries about last month.
“Buyers are in a strong position due to the number of homes available (an estimated two million) and the possibility of negotiating prices down even further with some very motivated vendors. It also helps that Spain offers cheap and easy access from the UK, and rental opportunities are good too. It basically ticks a number of boxes that Britain doesn’t, including the weather!
“Unsurprisingly, mortgage availability isn’t as good as it was a few years ago, but there are still lots of opportunities, especially if you have a healthy deposit to put down, and you can generally borrow up to around 65-70% of the value of the property. Rates currently start from just 3.2%.
“It may be a good time to buy property in Spain, but as always, it’s essential that you seek the right advice and go through the same process that you’d follow if you were buying a property in the UK.
“This includes taking independent advice from an English-speaking lawyer who is not connected to your seller, estate agent or property developer. It’s most certainly a buyer’s market, but you must choose carefully.
“Spain has had its problems, but its core appeal hasn’t changed. For many buyers it’s a lifestyle choice and they’re attracted by the climate, amenities and culture, rather than earning a prospective fortune on their home there.
“As long as you treat your property purchase as an investment over the long term, you can still buy with confidence, if you buy wisely.”
