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Hard facts: The lack of systems and rules in Spain’s property game is ridiculous

It's all positive news this quarter.In most northern European countries, including Scotland, but sadly not England, all sellers of properties have to provide factually correct information packs – ‘Home Reports’ – to potential buyers.

In some countries, these are prepared by state registered inspectors, whilst in others the estate agent is legally responsible for any errors or omissions.

If the packs prove to be significantly erroneous or even fraudulent, the seller can withdraw from the sale, even after they have moved into the property.

Unfortunately, it’s a completely liberated system in Spain, where nobody takes responsibility for anything and even the buyer can renege, pleading ‘in good faith’ if they didn’t check anything themselves. Property descriptions by agents on the internet and in their details, can be at best ‘mistaken’, but sometimes, either through their or the seller’s ‘optimism’, appear to be deliberately misleading. Continue reading

Not insuring your property correctly could cost you more than €30,000

auto-and-home-insurance6As an RICS registered valuers, we are constantly comparing properties in order to calculate the current market value.

These include ‘self-build’ properties that do not have decennial structural insurance.

To obtain, that involves supervision of the foundations and structure by an independent third-party specialist as they are built, and 10-year insurance against failure thereafter.

This is obligatory for promoters building on behalf of others, but it is optional if one is building a house for oneself.

However, without it, there is a restriction on sale, recorded in the title register, for 10 years from completion of the building.

A house without this insurance must be worth less than a fully supervised and insured building. Continue reading

How financially strong is your town hall?

location_locationWhy sussing out your local authority is fundamental before buying

The decision to buy a house is not just down to the attractiveness of the rooms, garden, location or general surroundings.

Consider the financial strength of the town hall, because if we compare Benahavís with Estepona, we get very different pictures.

Benahavís is reportedly one of the richest municipalities in Spain, though it doesn’t have a coastline.

How can that be? It’s because it contains so much natural advantages in south-facing slopes, tree-covered mountainsides, extensive views along the coastline and the mountain ranges towards Ronda. Continue reading

Quarterly Market Report – Summer 2016 – 12th October 2016

q-reportIn September we celebrated our 3rd year of Survey Spain, helping with ‘All Property Matters’.

This is our 11th Quarterly Report. We shall be pleased to provide more information if requested. As part of the research we have identified a number of wider and national property matters.

The Overall Market – Currency Fluctuations are having a big effect.

  • Brexit and the continuing uncertainty and bemusement caused by it, both in the UK based market and throughout Europe, has undoubtedly been the greatest factor affecting the ‘international’ property market in which we largely operate.
  • The immediate factor has been the two significant drops in exchange rate, with the latest ‘storm’ perhaps having more psychological effect than previously. Buyers and sellers are realising that sterling is likely to drop further and is reaching a new base level and unlikely to bounce back to what it was before the vote. The full effect of the most recent drop is still to be seen in values, but we expect that it will reduce the number of UK buyers.
  • The effect on sellers intending to return and sale price to UK will be mixed. Some may decide to wait for further drops in exchange rates to their benefit, but others will be more nervous at the reduction of buyer numbers. Either way, it’s likely to lead to a preparedness to drop their selling price. This will be especially evident in areas where UK owners traditionally dominate, such as in areas of Almeria and Fuengirola to Torremolinos on Costa del Sol.
  • Foreign exchange companies are still reporting that they have experienced a considerable drop in enquiries from UK, but many enquiries from Costa del Sol to transfer funds into sterling.
  • However, thankfully for many reasons, the British market is not by any means the only one and thus buyers from other currencies will have found more bargains. This appears to be the case for Nordic buyers who have shown a considerable increase in activity, although the overall EU and Euro uncertainties must still cause the more cautious to reconsider
  • Within Spain, the political situation is if anything more chaotic than before. It appears unlikely that there will be a Government with a secure majority any time soon and the likelihood of a third election is becoming more and more probable. The polls appear to show that there is more likelihood of a return of a right wing Government, though it will still be by a very small margin or possibly requiring an agreement to work with another party. In the meantime, the statistics for the Spanish economy appear to show growth so maybe the absence of government is not a completely bad thing!
  • Given that the property markets of the Costas are so heavily influenced by international buyers, the areas where these buyers predominate are largely unaffected by Spanish national politics except with regard to buying costs and general property and wealth taxes. These appear to be increasing and we have had conversations with individuals interested in a home in the sun, but looking at the costs and deciding that it just doesn’t make financial sense.
  • There is continuing and increasing concern at the attitude of Spain to Gibraltar. This is likely to be affecting the local market in Sotogrande and around.

Continue reading

How to avoid getting damp in your property

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Ready for the rain?

Sorry to put a dampener upon this fine weather (as I write), but the autumn rains are on their way. 

As mentioned in my last column, damp is the fault that we find most often in our building surveys. So much of it is avoidable with a few elementary precautions.

Let’s start at the top. The roofs collect all their rain and either pour it onto the garden or down drains and gutters, most probably too few and too small to cope with a deluge.

Make sure that the roofs and terraces are cleared of debris, as that is sure to block the drains.

If that happens, the water will find some other way down and most probably through the building. Installing gutters and downpipes puts you in control of where the water is going to go.

That should certainly not be just emptied onto the garden or path right beside the house. Continue reading

Has anything been learnt in the property game over the last 13 years?

marbella-sol

The same issues seem to keep resurfacing.

September 18 saw the 13th anniversary of the Survey Spain website www.surveyspain.com, which we take as the founding date of the business. 

Much has happened since 2003.

Looking through the old articles I’ve written over the years for newspapers and magazines, plus their transfer to website articles and then blogs, Facebook, Twitter and all, I’m struck by how little appears to have been learnt.

Article headings tell it all – ‘Why didn’t they get the property Surveyed?’, is a constant theme as so often we come across stories of ‘disasters’ that could have been avoided.

To rush forward to spend tens or hundreds of thousands and even millions, based on the word of somebody who is only being paid, and reluctantly at that, if the deal goes through, must be the height of naivety. Often it’s expressed as buying ‘in good faith’, but there are more blunt ways of expressing it too. An article I commented upon started with, ‘We spend about the same time choosing shoes or buying a suit as deciding which house to buy’. Continue reading

Taxing times in Spain

 

0,,15743033_303,00How Spain’s tax system is undermining the property market and its would-be buyers.

The situation in Spain is fragile, what with Brexit, the continuing dictatorship of Rajoy and the out-of-control national and regional debts. Tourism, residential expats and short stay are a major contributor to the Spanish economy that appears to carry on regardless.

However, it’s ‘on a shaky peg’.

All it would take would be one small tremor on land or a bomb in a tourist place, and Spain would be in the same position as all the other Mediterranean countries.

The exceptional numbers of tourists this year is not because of an overwhelming desire for Spain, it’s due to the impression of there being nowhere else ‘safe’ to go in the sunshine.

And as for the longer-term residents, they are being hit for tax in so many ways. Continue reading

Nine questions to ask when buying a home in Spain

A look at what to ask when buying a home in Spain

House inspectionThings aren’t always clear, especially in a foreign country and language. Often the answer to ‘why didn’t you tell me?’ is ‘you didn’t ask!’ The fact you didn’t know to ask is irrelevant.

These are the nine important questions to ask when investing in property.

  1. “Is the Spanish taxman’s value of the property higher than the price I am paying?” If it is, you may receive an additional tax bill, which can be quite a shock if not expected. It’s called ‘La Complementaria’. (A compliment like that one can do without!)
  2. “Are there any guarantees regarding treatment of any timbers in the building?” While wood rot is relatively rare in the area, insect attack can be serious and rapid. It mostly affects young, unseasoned wood.
  3. “Is the property 50 or more years old?” Properties over 50 years old should have a technical inspection to ensure the structural stability – Inspección Técnica de Edificios, which is required to be renewed every 10 years. “Does the municipality enforce it and is there a certificate of compliance?”
  4. “Have you checked that there are no abnormal ground conditions, nor archaeological remains, nor pollution nor asbestos?” All these could affect occupation, development or value of the property. Continue reading

Legal, regular or outlawed? How to tell if your property is legitimate.

Survey Spain SurveyAT last the Junta has passed legislation to bring an end to some of the nightmares engulfing owners of homes that have been found to be illegal.

For a property to be legal, it must be built within the urban ‘envelope’ of a municipality as shown on their Town Plans and to comply with all the planning and construction regulations.

Unfortunately, in the ‘Wild West’ boom period around the millennium tens of thousands of properties were built in Andalucia outside of these ‘nucleus’ areas.

They became ‘graffiti’ on the hillsides and whilst giving the new owners views ‘to die for’ and privacy and remoteness, they also destroyed the environment for others, caused pollution and eventually gave the Junta a real headache when it belatedly woke up to the situation (and realised that there was tax and licence income being lost).

They couldn’t just declare them legal as they weren’t and didn’t fit in with any of the planning requirements.

Often too, as we have seen during our surveys, they can be really ramshackle and don’t meet many of the building regulations.  Continue reading

Andalusian Parliament has approved the regularisation of 25,000 illegal homes in Andalucía

Housing stock Costa del SolThe Andalucía Parliament has approved to regularise the 25,000 illegal homes in Andalucía. The new regulation which counted with the abstention of Podemos and IU and the support of PSOE, PP and Ciudadanos enters into vigour after a year of debating. In Málaga province there are between 6,000 and 10,000 irregular plots.

The Andalucía Parliament today approved the modification of the Andalucía Urban Ordination Law (LOUA in Spanish), to regularise some 25,000 illegal homes, 8% of the total in the region which reached some 300,000 at the last census. Continue reading