Holiday home owners in Spain see 50% drop in occupancy rates

The owners of buy-to-let holiday properties in southern Spain are experiencing a devastating fall in rental this summer with some suffering a 50% downturn compared with last year.

The Valencian coast, which includes the normally popular Costa Brava, has seen July and August occupancy rates of rental apartments fall from 100% this time last year to as low as 50% in some cases.

Holiday home sales, hotel booking and package holiday sales have also fallen substantially as tourists have failed to arrive this year. Estate agents and rental agencies are blaming the global credit crunch.

One estate agent said it has only managed to sell two apartments on the coast this year. Eurosol said holiday rental inquiries have also fallen substantially and the number of 'for rent' and 'for sale' signs on properties are multiplying.

'People don't have the money to come on holiday this year. If they do they are looking for bargains and other ways to reduce costs such as camping,' a spokesman said.

Normally agents in this part of Spain would be quite busy with inquiries from holidaymakers who want to make their dream of owning a holiday home in Spain come true. But appointment books are empty.

Alicante already has some of the lowest rental prices in Spain. According to agents many owners are not particularly affluent. They have bought homes abroad to provide a future pension pot or short-term windfall on the assumption they would appreciate. Most have buy-to-let mortgages of up to 90% and are heavily reliant on rental income to cover monthly costs.

Years of low-cost airline flights and easy mortgage availability have fuelled this trend. The recent announcement from Ryanair that it will stop flying temporarily to Valencia this winter has also come as a shock to people with holiday homes in the area and could affect any hope of winter rental income.