“Be particularly careful of buying properties on reclassified, nonurban land and check all the necessary permissions have been obtained.”
It’s the little things that count Check for debt on a property, too, says Campbell-Royle. Unlike the UK, debt is lodged against a property rather than an individual and the
unwitting buyer could get a nasty shock. “If you do proper due diligence, it is difficult to buy a property that later on is found to have problems,” she says. “Those coming to Spain for a second property tend to be on a tighter budget. All that glisters is not gold either in the UK or in Spain, so make sure you get the right advice.” Costs are different from the UK and so budget on 10 to 12 per cent of the sale
price in fees. That breaks down as 8 per cent for the equivalent of stamp duty, plus legal fees and registration. Some people will consider this high, but in a market that still records prices at 50 per cent of historical highs, that is a small premium to pay. Finally, don’t forget the cash itself. Very few UK investors will be borrowing from a Spanish bank, so charges and exchange rates on transferred money could cost an investor dearly if they are not on top of their game.
It’s getting better all the time
AN ENGLISHMAN’s HOME Prices vary regionally, with the most popular having the most buoyant markets. That said, few have escaped 50 per cent losses since the financial crisis and so there are bargains to be had.
starts at around the €100,000 to €300,000 mark, and goes up to prices of €2m.
Coastal regions are the most sought after for the UK investor, but popular markets attract a premium.
The islands have always been more desirable and the average price is around €400,000 to €500,000. Some of this is driven by new rules that grant a visa to those with a minimum investment of €500,000 – which can be over multiple properties – and is attracting interest from investors in Russia, the Middle East and China.
A small two-bed property in Murcia may be priced at €50,000, while a similar property may be €75,000 or more in the Costa del Sol or Costa Blanca.
The Balearics remain the most sought after, with one estate agent claiming to have sold 16 homes in 2013 for more than €2m. It expects to double that figure this year.
Madrid and Barcelona remain prime locations and like London, sellers can name their price. The mid to upper end of the market
Meanwhile, Majorca’s fashionable Port d’Andratx saw 20 homes change hands for values in excess of €5m in 2013.
By applying some simple common sense, and undertaking the usual due diligence of a major investment, most UK investors will find navigating the Spanish property market relatively simple. Exchange rates have made Spanish property more affordable in recent months. For some people at or approaching retirement age, a property investment at these kinds of prices is even more attractive when financial markets remain volatile while offering meagre returns.
48