Despite a turbulent few years it seems that the British love affair with Spain is far from over. Conti, the overseas mortgage specialist, has seen a 33% increase in Spanish mortgage enquiries over May and June, and attributes the rise to excellent buying conditions and signs that the market is starting to bottom out.
According to the monthly house price index from appraisal company Tinsa, Spanish property values were down by 10.8% year on year in June, compared with 11.1% in May. And figures from the Spanish National Statistics Institute, INE, show that the decline in property sales in May were -9%, a lot less than the declines from January to March this year, which were between -21 and -33%.
Commenting, Clare Nessling, director at Conti, said: “Bargain prices and the opportunity to negotiate these down even further with some very motivated sellers mean that it’s most certainly a buyer’s market.
“In addition, despite the ongoing eurozone crisis, the growing strength of the pound, which has been rising against the euro to levels not seen for around four years, is boosting the budgets of British buyers.
“These factors, together with historically low interest rates, are making it more affordable to buy in Spain right now. And signs that the market is improving are starting to lift the confidence of prospective buyers.”
Conti says that mortgage availability is generally good, despite the negative headlines about the property market. Mortgage providers still have a healthy appetite for lending, with maximum loan to values still around 65-70%. Generally speaking, smaller deposits are possible in areas where house prices are more resilient, such as the Balearics, the Canary Islands, Madrid and Barcelona.
The company stresses the importance of seeking the right advice before agreeing to a purchase. Clare Nessling said: “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.
“It also 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.”