Spain
Spanish housing minister appeals to British buyers to return
The Spanish government has launched a direct appeal to Britons to help kick-start Spain's faltering economy by buying some of the country's 700,000 unsold houses.
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400,000 newly built homes near the coast in Spain are waiting to be sold Photo: ALAMY
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Spaninsh Housing Minister Beatriz Corredor Photo: AFP
By Harriet Alexander, Villamartin, near Alicante 7:30AM GMT 06 Feb 2011
Beatriz Corredor, the Spanish housing secretary, promised new planning laws to end the confusion which has led to some British home owners being ordered to knock down their properties deemed to have been illegally built.
"Come here calmly, and trust in the system that we have and the transparency we provide," she said.
"There is a very attractive offer on the table here, with prices significantly lower than two years ago, and you will certainly find what you are looking for."
Her plea reflects growing alarm in Spain at the huge stock of newly built homes waiting to be sold - of which 400,000 are near the coast - since the country's economic crisis began. Prices have tumbled by up to 40 per cent and banks and construction firms are desperate to recoup some of their investment.
In recent years, Britons have bought one third of all Spanish properties sold to foreigners. But many have recently been put off by horror stories of planning permission being retrospectively revoked and other complications, and the number of British buyers has slumped.
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"The British are our highest priority and are those about whom we are most concerned," Mrs Corredor told The Sunday Telegraph. "It is true that there has been... an image problem. Now we want to reassure the British, and all foreigners, that we are doing everything possible to put the details clearly on the table."
As part of a package of legal reforms to be steered through the Spanish parliament this month, for any property being sold the local council will be obliged to provide a document stating clearly its boundaries, the category of land on which it stands, its access to services including water and electricity, and details of its planning approval.
If someone buys a house with all the correct paperwork, Mrs Corredor said, they could be assured of its legality. "If there is not any mention of legal proceedings on the document, the person who buys the property through the correct channels will then know there is judicial support."
An estimated one million properties are currently on the market across Spain, including homes that have already been lived in by at least one owner.
The Spanish government's hope is that a return of British buyers will give a boost to the ailing economy by injecting much-needed liquidity into the banks, creating work for those involved in fitting out homes and helping to draw a line under free-falling property prices.
Over the next few weeks the Spanish government will also embark on a "roadshow" around Britain and other northern European countries to promote the country's property market. House prices have fallen on average by 24 per cent in the Malaga area and by 19 per cent in Tenerife, Mrs Corredor said. "They are very attractive reductions, especially in properties of high quality. They are properties that are worth the trouble."
John Heyes would agree. From his beachfront apartment on the Costa del Sol near Estepona, which he bought just over a month ago for €161,000 (£136,000), a full €100,000 cheaper than its original price, Mr Heyes, 66, urged others to seize the moment.
"There are hundreds of thousands of properties around, all at seriously discounted prices. Do your research and take your time, but it is a great opportunity."
Nick Stuart, a British estate agent who runs the website Spanish Hot Property, said: "There are huge bargains to be had there, such as villas in Marbella that are almost at half their previous prices.
"Get a decent independent lawyer and make sure that the property rights and bank guarantees are in place. Ninety five per cent of these horror stories could have been avoided."
But others are not so sure. And i the golf resort of Villamartin, near Alicante in south-eastern Spain, the scale of the problem facing Mrs Corredor becomes clear.
There are 120,000 empty new homes in the wider region, and in Villamartin rows of whitewashed houses sit empty, waiting for an owner. Signs hung over the balconies offer cheap sales for properties repossessed by the banks.
Sun-bleached billboards along main roads, advertising in English and Russian, offer dream holiday homes, but the empty streets, with just the occasional car with British number plates, tell a different story.
Robin Barton, 65, has lived in Villamartin for 10 years, and sitting outside The Stray Sod Irish bar, he said it would take more than a slick marketing campaign and technical changes in the law to bring back the British and end falling prices.
"The simple fact is that the Spaniards built too many homes," he said. "There is just not the demand for all of these houses, and with the rest of the EU in crisis too, nothing the Spanish government does is going to make people buy them."
He pointed to the shell of a half-built block of flats, its exterior walls complete but the building uncompleted inside. "That's been there for years. And no one will finish it. It just proves the lack of planning that caused all this mess."
Gabi Baischer, managing director of In Sun Properties in Villamartin, has not sold a single property to Britons in the last month. Flicking through her records, trying to recall the last time that British clients came to buy homes rather than sell, she said there were now only Scandinavians and Russians.
She drove around the winding roads of Villamartin, circling the golf course and past the Irish pub, pointing out the most heavily discounted properties. Everything is being sold at a vast reduction. On Thursday she sold a two-bedroom whitewashed townhouse for €107,500 (£90,700) less than half the initial price.
A British family is selling their villa with a swimming pool, originally bought for €320,000, for €260,000. A third property, a pretty three bedroom semi-detached villa with views down to the coast, is on the market for €205,000 €120,000 less than its original asking price. It too is being sold by Britons.
"Over 90 per cent of our business three years ago was British people buying," she said, "and now, it's maybe two per cent. It has totally dried up."
Meanwhile those who have become ensnared in complex legal disputes of the kind that have been a bugbear to foreign buyers - with some cases ending up in the European Court - warn that not even Mrs Corredor's change to the law will solve the problem for new buyers.
"The government in Madrid can give all the assurances it wants, but without it enforcing the laws nothing will ever change," said Charles Svoboda, whose Valencia home has been the subject of legal wrangling for the past eight years. His support group for property owners taking court action currently has 30,000 members in Valencia alone.
"The problem is that housing is often dealt with at a regional level, and national rulings make no difference whatsoever. And in small towns, there is often no one who is technically competent to enforce these laws.
"I wish the government all the luck in the world with these new proposals, and am sure they are well intentioned. But here it is like Alice in Wonderland. The housing rules may look the same, but actually everything is totally backwards."
Maura Hillen, 46, bought a home with her husband John near the town of Albox, 130 miles south of Alicante, only to discover too late that it had not been legally approved. She is sceptical about the impact of the new law, which in any case will not apply retrospectively to cases like hers.
"I look out of my kitchen window and still see houses being built where they shouldn't be," she said. "And for people like us, who bought our place three years ago and are trapped in legal limbo, you feel as if the four walls are closing in on you.
"We are being hounded by a machine that will not move, that will not blink. The legal situation for housing is just crazy."
They have formed a residents' association which has 700 members, and this weekend are meeting 36 other organisations in Andalucia to campaign for their rights to be respected.
They say that Britons considering a move to Spain should still be very cautious.
"Many places have the veneer of legality, but these laws from Madrid are never enforced on a local level," Mrs Hillen said. "Their intentions are correct, and I do think their efforts are in the right direction.
"But at the moment I would honestly say that British buyers should go somewhere else."
