Posted on: 19-05-2022 in Property
Investing in property in Spain may have been an idea when you enjoyed your holidays in cities such as Barcelona or Marbella. Who can blame you? Spain is a marvellous country with an excellent Mediterranean climate and a broad range of tourist attractions that many people dream of visiting.
Searching for an apartment on Booking.com or a villa with a swimming pool on Airbnb to spend your vacations can become a thing of the past if you decide to invest in property in Spain. The expat community is large there, the weather is great and Spain is only 3 hours flight from London.
We all know the Channel-4 tv programme that helps house-hunters find their dream holiday home in the sun. The tv show demonstrates how overseas buyers scan the French, Portuguese or, in our case, the Spanish property market. Based on their holiday experience in the country of Cervantes and Don Quixote, many expats buy their new homes there.
Some economists suggest that low-interest rates and flexible monetary policies implemented by central banks have created property market bubbles in many countries around the world. Spain is one of the European Union’s (EU) economic pillars. Is the Spanish property market overinflated? Is there affordable property in Costa Del Sol and Costa Blanca?
A report by El Pais noted that “there were around 100,000 housing starts in 2021, similar to pre-pandemic figures but far from the excesses at the beginning of the century; the year 2006 saw the number of new units soar to more than 750,000.”
The latest Spanish Property Price Index (Tinsa IMIE) for Q1 2022 showed that house prices in Spain rose by 6.6% on an annualised basis. In quarterly terms, the increase came in at 2.3%.
The report published by Tinsa IMIE revealed that 14 regions, including the capital city Madrid, the Balearics and the Costa del Sol saw property values go up by over 7%.
You may believe that buying the perfect property and enjoying the hot summers is easy. International buyers should ensure that the property purchase process is in line with the guidelines of the Spanish legal system. British property buyers can go to gov.uk and find more information on avoiding pitfalls during the process.
Below we will briefly explain what you should focus on to minimise the uncertainty of buying property in Spain. Holborn always recommends using a professional and fully qualified financial adviser for such transactions to avoid problems deriving from a lack of knowledge of the particular market.
Buying an overseas property requires us to be very careful with the legal aspect of the purchase. Spanish property experts recommend hiring an independent local lawyer who specialises in Spanish land law (urbanismo). If you choose to work with British lawyers, you should make sure that they are qualified to operate in Spain and that they have experience in international transactions.
You should also hire a Spanish notary who will be preparing the contract of sale and issuing the public deeds. Some Spanish property buyers prefer to employ a gestor for the paperwork; hiring such a qualified professional would save you time as the paperwork involved may cause you unnecessary stress.
Taking out a mortgage is a process that takes time and should be handled carefully. You will have to review your options and offers from various financial institutions until you decide based on your circumstances and available budget.
If you are unable to keep up the mortgage repayments due to financial problems, the lender could repossess your property in the country. The lender may also pursue your UK assets to recover the mortgage shortfall using a European Enforcement Order. That’s why financial advisers urge borrowers to get in touch with the bank to negotiate a new payment plan before a default occurs.
Spain has been a member of the eurozone since January 1st 2002. For any property purchase in Spain, you should pay the price in euros. Therefore, you should take into consideration the euro’s exchange rate with the British pound, the US dollar etc.
Depending on the currency market, the exchange rate can be a tool that could save you money or make you lose money during the purchase process. Currency transfers via your bank may be expensive because of high fees. Using an FCA-regulated currency transfer provider is the ideal solution if you want to save money and transfer funds effortlessly.
Spain isn’t only about sandy beaches, fantastic weather and strolls in historic city centres. If you would like to invest in Spanish property, perhaps you should also consider becoming a Spanish citizen thanks to Spain’s golden visa scheme.
With the UK out of the EU, Britons are considered third-country citizens. As a result, they are not free to travel without restrictions and their rights in the EU are limited. The Spanish golden visa is the way to solve these problems. By investing in Spanish property or bonds, just to mention a few of the available options, you get the right to become a resident of the beautiful Med country.
You can read more about the Spanish golden visa scheme and its requirements in our comprehensive blog. If you got more questions, we would suggest getting in touch with us and we will make sure you get the answers you need.
Finding the right property for your budget and needs in a foreign country isn’t an easy task. Each market has its requirements that foreign investors may not know. Spain is a beautiful country to invest in and live in. Whether you search for property in Costa Del Sol, Costa Blanca, Barcelona, Madrid or Bilbao, there is a wide range of options to match your expectations.
However, the process can be tricky for people who don’t have the necessary experience and knowledge. Holborn Spain is here to save you time and money. Our professional advisers are qualified to suggest the right solutions for you whether it is about choosing the property or taking care of the tax planning that will be required. We’d be delighted to meet you and plan your financial life in Spain, so don’t hesitate to get in touch with our team now.