Spain has long been a popular destination for British expats who have looked to the country for their retirement years. The strong demand for housing led to a buoyant Spanish property market.

However there is now a massive oversupply of new property. The Spanish government has estimated there are around 700,000 unsold new-build properties across the country, 400,000 of whch are thought to be on the coast and in the south, where the majority of expats reside. Of all Spanish properties sold to foreigners in the past few years, a third were sold to Brits.

On top of the new builds, there are around the same number of older homes currently up for sale at the moment. These depressing figures mean that some homes are now worth as little as 50% of what they were worth four years ago – and there is massive competition amongst those looking to sell.

It comes as no surprise to discover that Spanish property experts believe that the average house price is set to fall even further – with some estimating that prices will fall by as much as another 20pc.

The Spanish property nightmare reinforces the fact you should always purchase property with resale in mind. Estate agents have said that well maintained properties in prime locations will be sold quickest; those that are identikit in not-so-great locations are finding the property market difficult.

If you have cash, you may be able to pick up a bargain in Spain. With the massive oversupply of houses, now is a great time to bargain over the price. However don’t expect to see returns quickly – Spanish property in general should definitely be seen as a long-term investment and not a place to flip a house quickly.

It is as important as ever to do your research. The problem of Spanish properties being built without proper permission is thought to have affected as many as 100,000 homes on the coast so ensure that everything is 100% legal before buying.

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Many overseas property investors have traditionally looked to Southern Spain when investing in Spanish property. However Northern Spain is starting to gain in popularity because it is a world away from the built-up, owercrowded areas in the South and is full of spectacular scenery, a laidback, friendly culture and fantastic food.

Santander is the capital of the area and still retains some of it’s old charm thanks to it’s former role as a summer retreat for the rich. The climate is another plus point for the area as it doesn’t suffer from the heat of the South. Summers tend to be sunny and warm without the cloying humidity and summers tend to be fairly mild. The only downside is there is more rain than in the South however this means that the countryside tends to be green and fertile leading to some spectacular scenery in the surrounding areas.

Despite not having the boisterous reputation of some of the Southern property hotspots, Canatabria is far from boring. Activities range from sports such as skiing and golf, through to more gentle past-times such as fishing and bird watching. The infrastrucutre is also good with plenty of airlines, including budget ones, flying to the area on a regular basis. There is also a 24 hour ferry that travels between Portsmouth and Plymouth making it ideal for the UK property investor.

The seafront is probably the most popular area to buy in and is also likely to be one of the better areas for rental income. However don’t expect to buy new – there are few new property developments in the area however this means the area retains much of it’s natural charm. Because of this area’s of Spain’s history of attracting the aristocracy and rich – many of whom still retain second homes – property prices are relatively high however this can be offset with slightly higher rents.

The peninsula is one of the more sought-after areas and this is reflected in the price. Any property with a sea view is also likely to be expensive. For Spanish property investors looking for a slightly cheaper option, look for villas or apartments on the outskirts of Santander which tend to be a more reasonable price. Properties which are around half an hour’s drive inland can be up to 50 percent cheaper yet still eminently rentable. There are also plenty of properties ripe for renovation and restoration so as long as the property investor is prepared to do some work, there are Spanish property bargains to be had.

Property prices in the area have not been immune to Spain’s property price problems over the last few years however the market does appear to be recovering and stabilising. Some property agents have reported that searches in Cantabria are up by about a third with many buying foreign propertys looking to buy in Europe whilst attempting to steer clear of the more overdeveloped areas.

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The potential capital gains windfall for British expats who sold property in Spain before 2007 comes after the scrapping of a discriminatory Spanish tax law.

Now with the pound weak against the euro, and the clock ticking on securing refunds, all claims must be filed by 21st November this year. The Currencies Direct experts say there is no time like the present for expats to get their refund and repatriate the money.

Mark O’Sullivan, director of dealing at leading currency exchange firm Currencies Direct, said: “With a weakening pound and a steady euro, this welcome tax refund can be maximised by British expats who can make a claim and exchange their money as soon as possible.

“When yearly interest is taken into consideration on property sold as long ago as 1997, we are talking about considerable sums of money. It will be great for expats to get their cash back, but even better if they can use the current exchange rate to their advantage and get the most from their unexpected windfall.”

Capital gains tax paid by British expats who sold Spanish property before 31st December 2006 was charged at a ‘non-residents’ rate of 35%, compared to just 15% for Spanish residents.

The Spanish government changed the law in 2007, after the EU declared it discriminatory, but an estimated ten thousand British expats had already overpaid. Now they are entitled to a refund.

The claims deadline for those who sold property between 1st Jan 1997 and 31st December 2006 has been set for 21st November 2010, under a one year statute of limitation.

Dimas Cuesta from Lexland, a law firm that has already secured rebates for British expats, added: “The legal process requires expert advice, which is fundamentally important to the chances of a successful claim. British expats looking to be reimbursed should act now, before the claims deadline.”

Expats who think they have paid too much tax on their Spanish property sale should visit www.spanishpropertytaxrefund.com and use the online tax rebate calculator to see how much they may be owed.

About
Currencies Direct is one of Europe’s leading non-bank providers of foreign exchange payment services. Since it’s formation in 1996 Currencies Direct has evolved and positioned from being an innovative service provider of foreign exchange for consumers and high net worth individuals into a dynamic and pioneering ‘business to business’ fully integrated treasury solution service provider. Head quartered in the City of London (United Kingdom) with operations in Europe, Africa, Asia and the United States, Currencies Direct is part of the Azibo Group, a privately owned investment company.

Lexland provides legal services to English citizens living in Spain and for Spanish firms in the UK. Legal services for private clients and corporations covering practically all areas of the Law are also available.

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The pair of Spanish homes in question are near Albox in Almeria in south-east Spain. The local town hall had initially issued building licenses for the properties however court action by a higher regional government led to the licenses being nullified.

The Spanish homes under threat are owned by British expats who have vowed to fight for their homes. Many claim that both them and their builder were totally unaware that their building license had been revoked and that if bulldozers turn up, they will barricade themselves in their homes to attempt to stop the demolition.

The demolition order is not the first in the area – two years ago, another British couple had their Spanish property bulldozed nearby after their building license was revoked. The couple are now said to be living in a converted garage nearby and have yet to receive any compensation over the matter.

The Spanish government are currently cracking down on Spanish properties that have been built on green-belt land. Although several properties were bulldozed in early 2008, a court has ruled that demolition is illegal and so homeowners are now being notified of the issues with their houses. Around 500 miles of Spanish coastline are currently being targeted leaving many Spanish property investors concerned over the status of their investments. Celebrities and ordinary home owners alike have been caught up in the Spanish property bulldozing saga.

(Photo Credit: Mat C)

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Naturally, the problem of defaulting tenants is not one that is unique to Spanish property investors – Spanish landlords are also seeing the same issue. However many expats moved to Spain for a better lifestyle and were then bitten by the recession bug. Without wanting to lose a fortune on their new Spanish properties, they turned to the rental market in a bid to keep their property until prices started to rise again.

Half of the problem is that expat landlords are often unaware of some of the mechanisms that can be put into place to secure rental income. Without these safeguards in the rental agreement, they can be unprotected if the tenant defaults on their rental payment.

The most popular way to safeguard the rental income is to buy some form of insurance which will cover loss of rent for up to around six months as well as helping with legal costs. If the tenant fails to pay, the landlord should then look for the legal route however it can take up to 18 months for the case to work its way through the system and in the meantime, the landlord still has to pay their Spanish mortgage and associated bills. If the landlord refuses to pay for electricity and the electricity supply is cut off, the tenant is actually able to sue the landlord.

The moral of the story here rings true for any rental property, whether in Spain or elsewhere – take out insurance to protect yourself in case the tenant defaults. The insurance will not only pay for the mortgage over a pre-agreed time frame (usually six months) but will usually also include some legal cover.

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The Madrid research group RR de Acuña & Asociados has said the collapse of Spain’s building industry will cause the economy to contract for the next three years, with a peak to trough loss of over 11pc of GDP. The number of properties unsold still on the Spanish property market are said to be over 1.6 million, dwarfing the annual Spanish home demand of just 218,000. If no properties are built in the next few years, this means that it will take around seven years before the excess number of properties are sold.

Experts have said that Spain’s unemployment levels may rise as high as 25 percent. Spanish workers usually receive around half of their annual pay for 18 months if they lose their job, however the Spanish government have seen there is a potential crisis coming and has rushed in new laws giving 420 Euro a month to the long-term unemployed to help see them through. For those lucky enough to keep their jobs, many believe that wages will be squeezed down in a similar manner to the wage squeeze seen in Germany after the reunification.

Many property experts have said that now is a good time to buy property in Spain, as long as you are there for the medium to long-haul. However, we at BuyingForeignProperty.com disagree.

Yes, Spanish property prices may have dropped around 20% over the last year or so but this isn’t necessarily a reason to buy. The backlog of unsold or unfinished homes in Spain is tremendous and even without new homes being built will take around seven years to clear.

UK buyers probably represent the highest number of foreign property purchasers in Spain. However the UK is going through a housing market correction with the number of UK properties being repossessed increasing. This means that UK Spanish property owners may have a higher chance of defaulting on their holiday homes – and repossessed properties are often sold cheaply at auction, pushing down prices in the local area.

The high levels of unemployment in Spain may cause tourism to suffer in Spain. For anyone hoping to rent out their Spanish property, this will be a problem as less tourists means increased competition; and this usually pushes rents down and therefore return on investment will also fall.

The ‘credit crunch’ may also not yet be over – and this means Spanish property prices may fall even further. When the Spanish economy does recover, property prices are unlikely to rocket like they have done in the past meaning it may be several years before your Spanish property reaches the price you bought it for, let alone a price which will bring you a profit.

Overall, talks of a Spanish property recovery and a Spanish property market full of ‘bargains’ appear to be a lot of spin and a lot of false optimism. If you are planning to buy property in Spain now, it is advisable you only do so if you are planning for the very long haul – and you need to ensure you buy in a good area as backwater properties are unlikely to be a good investment. Whilst we wouldn’t say don’t buy Spanish property full stop, caution is most definitely advised.

In conclusion, the oldest advice in the book is more true now than it has ever been: Observe the market and do your research – look for unbiased opinion and don’t rely on marketing spin for your facts and figures.

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If you are buying a new Spanish property, before you complete at the Notary’s office, you will need to inspect the property and drag up a snagging list. This snagging list can then be given to a reputable builder and to your solicitor and written acknowledgement can then be drawn up to ensure that the snags are dealt with within a reasonable time frame.

To help you draw up your Spanish property snagging list, the team at BuyingForeignProperty.com have put together a list of common terms which should help you create your list:

Common Words:
Air-conditioning aire-acondicionado
Apartment/Flat : piso
Balcony : balcon
Bath : bañera
Bathroom : baño
Bedroom : dormitorio
Bell : timbre
Brick : ladrillo
Ceiling : techo
Central heating : calefaccion
Cupboard : armario
Curtain : cortina
Detached house : chalet/villa
Dining-room : comedor
Door : puerta
External wall : muro
Extractor : extractor
Fence : valla
Floor : suelo
Floor tile : baldosa
Frame : marco
Fridge/Freezer : frigorifico-congelador
Garage : garaje
Garden : jardin
Gate : verja
Glass : cristal
Grill : reja
Hand-rail : barandilla
Hob : quemador
Inside wall : pared
Keys : llaves
Kitchen : cocina
Lamp : lampara
Light : luz/luces
Light bulb : bombilla
Lock : cerradura
Lounge : salon
Mirror : espejo
Oven : horno
Paint : pintura
Picture : cuadro
Pipe : tubo
Piping : tuberia
Plug/Socket : enchufe
Roller blind : persiana
Roof : tejado
Roof tile : teja
Rug/Carpet : alfombra
Shower : ducha
Shutter : contraventana
Soil : tierra
Solarium : solario
Staircase : escalera
Stones : piedras
Switch : interruptor
Tap : grifo
Terrace : terraza
Terraced House : casa adosada
Toilet : aseo
Wall tile : azulejo
Washbasin : lavabo
Window : ventana
Wire : cable
Wood : madera

Useful Phrases:
A crack : Hay una grieta
A hole : Hay un agujero
It doesn´t fit properly : No encaja bien
It doesn´t work : No funciona
It won´t open : No abre
It won´t shut : No cierra
It won´t switch off : No apaga
It won´t switch on : No enciende
It´s broken : Esta roto
It´s damaged : Esta danado
It´s damp : Esta humedo
It´s leaking : Tiene una fuga
It´s loose : Esta suelto
It´s not straight : No esta recto
It´s ruined : Esta estropeado
It´s scratched : Esta rayado
It´s stuck/blocked/obstructed : Esta atascado
It´s wet : Esta mojado

We hope the Spanish property snagging list vocabulary is useful. If there are any words you feel we’ve missed, please add them in the comments section below and we’ll update our list!

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The dream of hundreds of golfers who yearn for a property on one of the Costa del Sol’s fabulous courses is about to be delivered.

Known as ‘Golf on Your Doorstep’, the exciting initiative enables golfers to buy a share in a luxury home and enjoy playing rights at a prestigious golf resort.

Fractional ownership (shared ownership in perpetuity) is a fast growing sector of the property market. It is considered to be one of the most financially astute ways of purchasing overseas property.

European market leaders, the Fractional Ownership Consultancy and its sales and marketing arm, The Fractional Group, have teamed up with International Golf & Resort Management (IGRM) to take fractional ownership to new heights with the delivery of the ultimate golf locations, luxury homes, golf playing rights and impeccable concierge services.

The first project to be released is at Alhaurin Golf – an Andalucían pueblo style resort built around a Seve Ballesteros course in the breathtaking Sierra de Mijas Mountains. Just 30 minutes drive from Marbella and the international airport at Malaga, the cost of ownership of a fractional apartment at Alhaurin Golf starts at just 25,000 euros for a 1/12th share which gives 4 weeks usage a year and includes playing rights at the club and on the nearby courses of Cabopino and Calanova.

Alhaurin Golf boasts fabulous playing and practice amenities. As well as the beautiful 18 hole course, which combines spectacular tee positions with views of the majestic mountains and Mediterranean Sea, there is a 9 hole par 3 course and an academy – renowned as one of the best in Andalucía. Not only for golf enthusiasts, the resort is also ideal as a family holiday retreat with its 4 star hotel, swimming pools, gym, fitness centre and tennis club.

The 2 and 3 bedroom largely frontline apartments are sold ready for occupation. They have fully fitted kitchens and are tastefully decorated and furnished by a leading design company. Led by CEO Michael Longshaw, a former senior executive at Forte Hotels and MD of Brocket Hall, an on site team will provide personal concierge services to take care of owners’ every need, from the booking of restaurants, tee times and excursions to airport pick up, maid service and the delivery of groceries. IGRM will also handle the management and maintenance of the properties and the owners’ calendar and rental programmes – ensuring that the vacation experience is seamless and the pressures of owning a property are removed.

Of the initiative Michael Longshaw, who recently appeared in ‘Raising the Roof’ in the New York Times on line said, “Golf on Your Doorstep should appeal to golfers looking for an affordable second home in the sun that they and their families can enjoy. We have some superb properties to unveil, the next being the jewel in our crown – luxurious frontline apartments with memberships at one of the most renowned championship venues in Europe. And if it’s not enough to have a fairway at the end of your garden, then the investment potential and rental income should appeal to savvy investors. We believe we are truly delivering the dream.”

Visit www.thefractionalgroup.com or call 0800 046 7322 or 00 34 952 89 95 85 and see www.alhauringolf.com for further information.

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Based in new, luxury offices in Marbella, Spain and within FOC’s headquarters in Guernsey in the Channel Islands, The Fractional Group is the most comprehensive “one-stop shop” for shared ownership. Its team of real estateand investment professionals handle general questions, sales, financing, management, marketing and even furnishing issues.

The Fractional Ownership Consultancy (FOC) is the UK authority on shared ownership. For over nine years FOC has led the way in providing developers with the legal and administrative framework for selling and managing the most successful shared ownership products in Europe.

The Vigia Group’s Parque da Floresta in Western Algarve was the first to sell property in fractions supported by FOC knowhow. The Oceanico Group use FOC’s fractional structure on many of its resorts across Portugal using brand names like Stepping Stones and Prestige Fractional. Acordo adopted the FOC model for its ultra modern homes at Bom Sucesso and Barrasford & Bird have also adopted it for its new project in Samos. Today FOC’s fractional portfolio spans well known resorts in Spain, Portugal, Greece, Cyprus the US and the UK.

The Fractional Group is now offering an even wider range of exclusive, luxury properties built by some of Europe’s largest and most trusted developers.

CEO of Fractional Ownership Consultancy Jerry Cobb says: “Clients as diverse as Taylor Woodrow Espãna and AquaPura in the Douro Valley show that The Fractional Group is dedicated to bringing the consumer the very best investment and leisure products in every price range. FOC’s unrivalled knowledge of the fractional property market and our sales pedigree is encouraging many more developers to sign up with us. Just watch this space.”

The first of many developments to be launched by The Fractional Group will be the Alhaurin Golf Resort on the Costa del Sol. Fractions start from just €25,000 for a 12th fraction (4 weeks use per year) and owners can play free golf at a variety of courses as part of the purchase. There is 100% financing available to purchasers subject to status.

For further information, please visit www.thefractionalgroup.com and www.fractional.net or contact:
Kerry Clark, Tideway Communications, 020 8878 0787
kerry@tidewaycommunications.com

Wayne Piercey, The Fractional Ownership Consultancy, 01481 747803
wayne.piercey@fractional.net

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The most notable decline in visitor numbers came from the US where visits fell by 17 percent to 3 million.

The top UK visited towns, in order of popularity, were London, Edinburgh, Manchester, Birmingham and Glasgow, proving that property investors would do well to look in these five major cities if they wish to invest in UK property.

Matching the decline in visits to the UK, UK residents also made fewer visits abroad in 2008 – down 0.6 percent to 69 million visits. Again, the final quarter of the year saw the most marked change with visits down 9 percent. Spain and France remain two of the most popular countries for Brits to visit, although slightly more unusual countries such as Romania, Mexico, Egypt and Slovakia are starting to prove a lot more popular.

John Luke Busby, director, London-based French mortgage specialist, Athena Mortgages, comments, “Once again, France and Spain remain the most popular destinations for Brits. But we aren’t just crossing the channel for our holidays. There has been a noticeable increase, recently, in the number of people enquiring about buying, or actually buying, French property.

“The main reasons for this are exceptionally competitive mortgage finance, the support being given to the French property market by the Sarkozy-led tax incentives and, closer to home, continued nerves surrounding the UK property market.”

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