A specialist mortgage broker has reported that with Spanish house prices taking a turn for the worst, bargain-hunting Britons are leaping to get onto the Spanish property ladder.
As Spanish properties are suffering their biggest decrease in value since the economic recession began in 2007, It has been reported that there has been an influx of interest in Spanish properties. The country’s economic downturn and continued banking problems have left properties desperately trying to sell in and across Spain with little outcome.
However, every cloud has a silver lining with overseas mortgage specialist Conti having seen an increase of enquiries regarding taking out a Spanish mortgage. The rise in interest over May and June is up by 33% in comparison to previous monthly averages.
This is despite the fact that the monthly house price index from appraisal company Tinsa, is showing that Spanish property values were down by 10.8 % year-on-year.
Director at Conti, Clare Nessling has said that there are a combination of factors which are playing a part in the boosted budgets of buyers. She said: ‘The Spanish market has reached a low point, so buyers are using it as an opportunity to shop for a bargain.’
In the meantime, the rising strength of the pound against the euro combined with interest rates being at an all time low, is making having a holiday home appealingly affordable. ‘It ticks a number of boxes that Britain doesn’t; including the weather,’ she added.
As a mortgage provider in over 40 countries, Conti says there is a healthy appetite for lending in Spain. It adds that figures from the Spanish National Statistics Institute, INE, show that the annual decline in property sales in May was only 9%, a lot less than the declines from January to March this year, which were between 21 and 33%.
If you fancy buying property in Spain, try to think long term...
It’s common knowledge that Spain’s economy, banking system and property market are suffering. Despite the fact that interest in buying Spanish property is on the up, this raises the question: “Is now the best time to invest in overseas mortgages and Spanish property?”
Ms Nessling of Conti - Overseas Mortgages, however, said: ‘If you are looking for the long term market, then it is [a good time to buy], for holiday and retirement homes.’
She added: ‘You should always go through the same process that you would follow if you were buying a property in the UK.
Take independent advice from an English-speaking lawyer who is not connected to your seller, estate agent or property developer. And ensure an independent valuation of the property is carried out, even if you’re buying in cash.’
Director of Conti - Overseas Mortgages, Clare Nessling makes this warning due to the increase in the number of British bargain hunters being taken advantage of by people selling property in Spain.
A week ago Money mail reported about how potential investors were being scammed out of their life savings by forceful spanish property sellers offloading cheap houses, apartments, villas and timeshares etc.
The property meltdown has provided a huge quantity of bargain Spanish properties, where in some instances, prices have been sliced in half.
These bargain basement prices have appeared as developers, or Spanish banks that repossessed them, are desperately trying to get rid of them from their systems.
A scarily large chunk of these Spanish properties (estimated at 300,000) are often missing gas, electricity, mains water or even planning permission.
Overseas mortgage broker Simon Conn says: ‘In many cases, people are seduced by the sea, sangria and relaxed Spanish lifestyle. They do not think straight about why a property is so cheap.
‘Before you buy, always ask yourself: Is the price low because the owner has fallen on hard times or just needs to sell? Or is it a property that should never have been built in the first place?’
Conti, the UK’s leading overseas mortgage specialist gives the following advice to people interested in buying Spanish Property. 'It pays to be selective. Many so-called bargains are being offered at knock-down prices because they’re of poor quality and in undesirable locations.’
'It’s very easy to be pulled in by descriptions of ‘cheap’ or ‘knock down’ prices, but you really don’t want to end up with a toxic asset simply because you didn’t do your homework or take the right advice.
'It may be wise to look at re-sales, where you can get references from previous buyers and check any other re-sales being offered on the same development. As a result, you’ll get a much better idea of the property’s true market value.’
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