Javea, Costa Blanca, Spain – June 4th 2014 – The crash of the property market in Spain and the subsequent dire economy, meant many Britons had to sell up and returned to the UK, according to British estate agent Geoffrey Miles and works from an agency in central Javea on the Costa Blanca.
“Many people from the UK were forced to sell their homes at a great loss,” explained Mr Miles. “And these were actually the lucky ones – others who were employed in the area and were purchasing their home through a mortgage and consequently lost their jobs and any means of earning a living, had their homes repossessed. I know of a number of expats who returned to the UK practically penniless.” He went on to explain that the number of British people living in the area had not dropped considerably due to many UK expats living on the Costa Blanca having a fixed income, as they are retired with a UK pension and therefore not reliant on Spain’s economy.
The estate agent says the poor economy and burst of the property market bubble has led to a huge glut of empty homes for sale across Spain, and with many of them being bank repossessions, buyers can now find fabulous bargains in the Spanish property market place.
Mr Miles revealed that this year so far, more than 40% of his sales have been to UK buyers, an increase of more than 20% over the same timeframe last year. Mr Miles said a Javea property that would sell for €400,000 at the peak of the property boom in 2007, is now likely to achieve only half the price. The average price of a property his company sells is currently around €170,000, compared with €250,000 in 2007.
The strength of the British pound is surely helping sales, as the end of May 2014 saw the pound rise to its highest point against the euro in 18 months. This is an improvement of 7% since the end of last summer.
However, in spite of the cheap property prices Mr Miles does not recommend buying a property in the country as an investment at this time. He says there are other parts of the world where you will get a better return on your money – but he does definitely recommend buying a property in Spain if you wish to relocate, or use it as a holiday home.
As a foreign buyer Miles says it is very difficult to obtain a mortgage with a Spanish bank, and you will probably need around 30% of the asking price and should look at a further 14% to cover purchasing fees. “You may find a lender in the UK who is willing to lend you money to purchase a Spanish property”, says Mr Miles, “but the number of lenders prepared to do this is still limited.”