UK property shocks boost Spain sales

By Kevin Barnett, 10 Apr 2008

MUST SELL BARGAIN | Save €40K La Finca Golf

UK property buyers, in shock following the sudden decline in the domestic market and state of the UK economy, are showing increased interest in the bargains now on offer in sunny Spain.

Spain’s property slowdown is seen as offering more opportunities compared with the constricting UK economy. Many Brits are realising they can get on the property ladder by grabbing a bargain-priced home in the sun, enjoy more property for their money, with lower mortgage repayments and running costs.

There is also more property choice in Spain amid a multitude of varying locations ranging from Real Spain villages to cosmopolitan Costas plus the famous lifestyle and climatic benefits of the Mediterranean.

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Affordability :: Spain av £189,932 | UK av £222,256
Price movements :: Spain 20% discounts | UK + 1.1% 07-08
Availability :: Spain surplus + discounts | UK shortages
Running costs :: Spain typically £1,000 pa | UK average £4,201 pa
Living costs :: Spain 30% lower
Rentability :: Spain good as long-term subsidy and record tourists
Rentability :: UK declining as non London over supply.
Mortgages :: Spain “Can do” attitude | UK “Can’t do” attitude
Loan to Value :: Spain 80-90% | UK 65-75%
Interest rates :: Spain 5.25-5.50% | UK 5.79-7.59
Currency 6 months : Euro +19% | GBP -19%
Bank of Spain :: Enough surplus to cover credit demand
Bank of England :: No surplus, injecting extra £billions weekly

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Despite recent Bank of England interest rate cuts, typically UK interest rates are being increased to 6.45% with Kent Reliance Building Society raising their rates to an eye watering 7.59%. The British housing market is in shock with 40 per cent fewer applying for mortgages. Applications are down from 122,401 in December 2006 to 72,880 just 12 months later.

The situation is worsening by the day. It has been reported that as many as 500 deals are being pulled each week. One insider says ‘Prices and buying criteria are being modified by the day’.

In Spain, mortgage availability remains good, the Government is lowering property taxes, subsidising long-term rents and retraining 1,000s of newly unemployed construction workers affected by the slowdown.

Developers have upped the specifications with air-con, fitted appliances and rental guarantee deals and, in a dash for cash, many are reducing prices as unsold properties in the pipeline become key ready

Google ranked number one source for Spanish bargain properties, PropertyInSpain.Net, have seen inquiries increasing in recent weeks with around 2,500 UK buyers selecting bargains in Cost Blanca, Costa del Sol and other prime locations. They are competing with Russian, Italian and Scandinavian bargain hunters.

Said a spokesman: “We offer bargain Spanish bank repossessions and must sell homes from developers and private owners and the interest levels have grown in recent weeks. Many buyers tell us they now have more confidence in the Spanish property market than the UK and are convinced they get more for their investment.

“They see that Spain offers an alternative lifestyle with greater opportunity than does the constricting UK economy.”

Property in Spain Information Centre
Spanish Property News Service