The Truth About Buying in Spain

The Hondon valley, a mountainous, small enclave of villages plus farms 40 miles inland from Alicante has been a serene idyll for scores Brits which came seeking a place in bright Spain aside from the sizzling heat and concreted Costas. But since the recession masses hit by the poor Euro exchange rate have been enforced to sell their villas at rock bottom prices or give the keys back to the bank.

“Marbella is at its peak right now”

Regardless of what we pick up about Spain’s dire financial situation, intensified unemployment figures and landscape littered with unsold homes you would be hard pressed to see a gloomy estate agent. In reality in some areas they are positively enthusiastic.

Michael Lovett, director of Fine & Country Marbella says: “Marbella is at its summit at the moment not just because of the bad weather in the UK but because the area is undergoing a real revival. Changes to the cultural scene and the transport system have recently been made to re-establish Marbella as the place to live and as a backwash, the future of the property market is encouraging.”

Number one purchasers are Russians and Scandinavians
Surprising perhaps but Spain is still the number one destination for Brits; although according to British builder Taylor Wimpey Espana, their most common buyers are now Russians and Scandinavians. “On the Costa del Sol alone, 45 per cent of the entire sales this year have been from both Scandinavian and Russian buyers,” says Marc Pritchard, Taylor Wimpey’s sales and marketing administrator. The developer is selling two-bedroom apartments as well as three-bed penthouses on its La Floresta de la Mairena scheme near Marbella, priced from €178,000. As well as at Avalon, also in Marbella nearby the Los Arqueros golf course, it is offering two and three-bed apartments boasting sea and golf views from €250,000.

British estate agent Mercers are also very positive concerning the property market in Murcia. “Prices look to be holding firm,” said Chris Mercer, who has 29 year knowledge of selling freehold Spanish properties and sells mostly to retirees aged between 47 and 65. “The typical age of our buyer is approximately 60 and spends amidst €110,000-€200,000,” he says. “They’re not just coming to buy a bargain; they want a good property they can enjoy. I boldly predict our sales to build by 25 per cent in 2013 over 2012.”

Problems for those seeking mortgages
He adds that houses priced at €195,000 are now selling for almost €185,000 nevertheless he does expect problems for those needing mortgages.
“The main effect is that bank funding will continue to be a complication in Spain. If a purchaser wants greater than 50 per cent loan to value and the property is not bank owned, it really is a no-go situation. This will limit the retail to wealthier cash-rich buyers and steer people in the route of, often less worthwhile, repossessed homes.”

Nothing stopped Peter and Jennifer Siggers, both 62 (pictured left) from selling up and acquiring a three-bed, three bath villa with personal pool in Camposol, Mazarron for just €155,000 which they found on Mercers’ website. “It was unattainable to match euro-for-euro elsewhere on the Spanish Costas or islands,” says Peter, a former manager of a timber merchant in Nuneaton, Warwickshire. “We’re not left out, have views to the hills and the countryside, yet can reach the social bustle of the on-site restaurants, bars and shops on foot or via a quick car journey.”

Interestingly Spain’s infrastructure doesn't seem to have suffered since the downturn. Daniel Chavarria Waschke, who heads up Balearics Sotheby’s International Realty containing offices in Mallorca and Ibiza, reports that the airport in Mallorca has been expanded and improved and that there are several private hospitals and medical professionals operating to extremely high standards.

Sothebys are positioning themselves to target the high net-worth buyer
“Health care equals or exceeds standards found in northern Europe,” he says. “And a couple of years ago new roads were delivered across Mallorca. We understand there are many more potholes in England.” Such is the assurance of Sothebys that they're positioning themselves to target the high net-worth buyer. “We have altered our real estate portfolio to exclusively market only houses with a sale price exceeding beyond €2 million and apartments more than €500,000 to suit our target audience,” Daniel boasts.

Unfortunately none of this is of any comfort to those bound to homes they can’t sell or leave behind like Diane and Bruce Bastin, who paid cash for their home 10 years ago.

We discovered Hondon quite by chance,” explains Diana. “We just discovered the valley after driving over the mountains and fell in love with it. It was peaceful, and unspoilt.”
They bought their three-bed, two bath villa with pool from a builder plus a neighbouring stretch of land to safeguarded their privacy.

It is 40 minutes from the beach, in secluded spot, close to the village and built from natural stone and sits on a large block of land. However its €295,000 sale price has drawn few buyers. Now Bruce has decided to reduce it to merely €199,000.


Diane, 76, a retired company secretary and Bruce, 75, a previous record producer, decided to sell due to Bruce’s poor health. He had a triple by-pass last year. Fortunately they've retained a home back in the UK on the Sussex coast.
“Our house would be ideal for a couple who wanted to manage a business,” says Diana who's also happy to include several furniture pieces in the sale. “There is plenty of space for a workshop or office. I had thought of running a kennels.”
The spacious, single storey house stands in one-acre bordering an Almond farm and vineyard with views of the valley and mountains. It has a developed garden of fig and olive trees and oleander bushes surrounding a large pool.

This mountainous region has proved particular desirable to downsizers and retirees since the weather conditions are cooler making it more tolerable in summer.