In May alone, Spain accounted for 44% enquiries received by overseas mortgage specialist Conti, overtaking France for the first time in a year.
The firm says that with banks such as UBS predicting that Spanish property prices have another 8% to go before bottoming out, buyers are taking the opportunity to snap up bargains from some very motivated vendors.
It also helps that Spain offers cheap and easy access from the UK, good rental opportunities and much better weather than the UK.
According to data from the General Council of Notaries, the number of foreign and non resident buyers of Spanish property increased by 28.4% last year, compared with 2011, and the British are the biggest buying group.
The firm pointed out that efforts being made by regional estate agents and tourism boards to improve Spain’s tarnished image are leading to high hopes that increased foreign investment will eventually help to revive the country’s property market. The market should also be bolstered when a new law granting automatic residency to non European Union nationals buying property worth at least €500,000 is passed.
‘There’s no denying that the country’s financial and economic woes have left a huge glut of new and repossessed properties sitting empty and struggling to sell, but some bargain basement prices are turning heads, particularly those of the British, and there may never be a better time to buy a Spanish home,’ said Clare Nessling, a director at Conti.
‘Mortgage availability, unsurprisingly, isn’t as good as it was a few years ago, but there are still lots of opportunities, especially if you have a healthy deposit to put down. It’s generally possible to borrow up to around 65 to 70% of the value of the property, and rates currently start from just 3.2%,’ she explained.
She pointed out that it is essential for buyers to seek the right advice and to go through the same process that they would follow if they were buying a property in the UK.
The firm’s top tips for buying in Spain include making sure you obtain an Approval in Principle as this will confirm that you can obtain the necessary funds before signing any dotted line and prove to sellers that you’re a serious buyer.
Buyers should also take exchange rate fluctuations into account as it is generally recommended that an overseas mortgage and the income used to service the mortgage repayments are in the same currency, thus avoiding exchange rate issues.
If buying from a developer, the firm recommends that buyers check their track record and how long they’ve been trading. They should obtain references from previous buyers and check comparable properties in the area and any re-sales offered on the same development.
Buyers also need to bear in mind that bills don’t end at the asking price. Lawyer's fees, local and national taxes, insurance, and so on, can often add at least a further 10% to the cost of a property.
It is also important to take independent advice from an English speaking lawyer who is not connected to the seller, estate agent or property developer.
