Warning over knock-down Spanish 'bargains'
Friday 27th July 2012
Despite the well-documented pain in Spain, where house prices have crashed and many homes have proved impossible to sell, it seems that the British love affair with Spain is far from over.
Conti, the overseas mortgage specialist, says it has seen a 33% increase in Spanish mortgage inquiries over May and June, and believes that the property crash in Spain could now be bottoming 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. Separate figures from the Spanish National Statistics Institute, INE, show that property sales in May were 9% down on the month before – horrifying, but less than the 21-33% declines in sales from January to March this year.
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 property market.
Mortgage providers typically offer loans at 65-70% LTV.
But Nessling warned that it is still possible for expats to get trapped with toxic assets.
She said: “Many so-called bargains are being offered at knock-down prices because they’re of poor quality and in undesirable locations.”
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