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British desire to move to Spain

Brits moving to Spain, cheap property spain, buying property spain, property market spain, 2008, property purchase advice spain

The Great Escape

While massive price gains over the past decade have increased property prices beyond the reach of many hopefuls, the number of Brits seeking to move abroad has more than doubled in the same period. A survey carried out in February by the international research agency ‘You Gov’ showed that 35% of the 2000 sample people questioned were considering a purchase abroad within the year. The main reasons for wishing to flee Britain were; increased concern about ‘yob culture’ (the most concerned being women respondents), followed by the high cost of living and the British weather. All in all, a high number of Brits are keen to move abroad ASAP but the current poor exchange rate, ‘credit crunch’ and difficulty in selling up in the UK are delaying these plans.

So if people a desperate to make a major life change but are being held back, is there a solution to bring these plans forward? The simple answer is a definite yes, but a re-think of exactly how the great escape can be orchestrated will need to take place. It’s the ‘plan B’ or ‘Tom Dick and Harry’ method that has served crafty Brits well in the past, and there is certainly more than one way to realise a move or purchase abroad within 12 months.

Primarily finances will normally dictate if and when things can happen. If a typical couple or family are seeking a €350k property in Spain, they will probably need to sell their house in the UK to raise funds or take on a substantial mortgage (‘plan A’). On the other hand (‘plan B’), if the purchase price was just €80k, they might be able to buy without selling up in the UK or be happy to take out a re-mortgage for the 80k, which might easily be paid with rental income from the UK home (both rents and rental demand are on the increase). Alternatively bridging loans are available (a good mortgage broker will seek out the best deals for you) such that the time period for a successful sale might be extended e.g. to 2 or even 5 years on sometimes very affordable terms. Once again if the figure is just 80k for a home abroad instead of 350k, the risk is far less and the time scale may be transformed from ‘little hope this year’ to ‘completing next month’. So where are the properties for 80k!!?? Though it sounds improbable there are actually liveable properties for sale for this figure and some as low as 15k!, the reason being that a credit crunch unfortunately means that an increased number of properties will be repossessed, (the first half of 2008 has seen record numbers of bank repossessions).

Some properties will be available via estate agencies while others will go to auction. The Spanish system normally involves up to three auctions, the first and second auctions involve a reserve price (remember this may simply be what the bank is owed and much less than the true value, though the law limits the minimum sale price to between 50 and 20% of actual value depending on the date of the escritura). If required, the second auction may have a reduced reserve and if the property reaches a third auction it normally goes to the highest bidder (no reserve but potentially restricted by law). The bank need to turn bad debts back into cash even when it is at a loss. ‘Taking advantage of the bank?’ now that does sound good!

Buying this way could secure a property with decent accommodation and in a decent area for a realistic figure of between 50 and 100k. While this may or may not be the property you intend to stay in forever e.g. it could be a 3 bed apartment rather than a villa (though houses and large villas can be snapped up too), it achieves a number of objectives 1. An escape abroad ASAP 2. A bargain purchase that would normally be immediately of higher value than the price paid. 3. Far less financial risk.

Examples:-

Property Type:- House

Location: Lliria
Price: First auction reserve 56,100 euros

Surveyor's tips*: Repossessions can be of all types from a 200 year old house to a brand new one. It’s important that you know about the type and condition of the property. Fortunately viewing can normally be arranged along with a structural survey if required.

Property type:- Apartment

Location: Oliva
Price: First Auction reserve 23,826 euros

Surveyor’s tips*: Remember that the cheapest apartments may be those in higher blocks without lifts. If it’s between the 1st and 4th floors with a lift it may be worth bidding more for. Decent views will also add to value.

Property type:- 2 bed Bungalow close to golf club

Location: Algorfa

Price:- 56,000 fixed (no auction)

~Surveyor’s tips*: Getting a brand new or nearly new property at a bargain repossession price, seems like a fail safe deal, but remember that communal facilities to some of the newest developments may not be completed in the near future (especially if the repossession is from the developer!). Some properties have not been built to a well controlled standard and defects can still exist, so ‘brand new’ does not necessarily mean ‘structurally sound’. When it comes to repairing responsibilities financially unstable builders can be hard to pin down and 10 year (decenal) guarantees will only cover structural stability and not issues like leaking roofs. Full legals should always be checked.

Summary:-

Many estate agencies will have repossession properties on their books so simply pop the ‘repo’ question. A simple keyword search on the web will result in numerous repossession opportunities. Buyer’s should bare in mind that there are some great value deals to be had on non repo properties at present, so keep an open mind while hunting as you may well find your perfect retreat via a conventional purchase route. For those people that don’t yet live in Spain, most residents you speak to will be able to confirm that you can still walk the streets with your family safely at night, use less fuel, eat out relatively cheaply and enjoy over 300 days of sunshine every year!

If you need assistance e-mail Mark for free initial advice: markpaddon@terra.es

* Surveyor’s tips are not directly related to any specific listed properties. The condition of listed properties is not known. Buyers should arrange to check property condition and legal issues prior to purchase.

Article by Mark Paddon BSc Hons Building Surveying. MCIOB. Structural Surveys, purchase and defects advice in the Valencia Community.
T: 962807247 M: 653733066 www.surveysspain.com Free 17 page property buyer’s guide available on request.

Published: 2008-08-25
Author: Mark Paddon

About the author or the publisher
Mark Paddon BSc Hons Building Surveying MCIOB.
Graduated from Liverpool Sir John Moores University in 1992 with a 1st class honours degree and prizes for best dissertation and best student. Mark has worked for 6 years in the Valencia community Spain proving structural surveys for home buyers, defects advice and expert witness reports. Mark has also consulted for Channel 4's 'Selling Houses Abroad' (appearing in 3 episodes) and writes property related columns for two local papers.

www.surveysspain.com

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