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Lack of Transparancy in Spanish Property Numbers highlighted by Roadshow

Spain’s high profile publicity drive to attract overseas buyers has been branded an insult by
leading finance professionals and property investors. Commenting on the six-nation tour which launched in the UK last week, José Ivars-Lopez, a Senior Manager at Currencies Direct, said: “The timing of this initiative couldn’t be worse when there are currently an estimated 50,000 investors experiencing great uncertainty regarding existing property deals and banks being restrictive with credit for non-residents.

Spain’s high profile publicity drive to attract overseas buyers has been branded an insult by leading finance professionals and property investors.

Commenting on the six-nation tour which launched in the UK last week, José Ivars-Lopez, a Senior Manager at Currencies Direct, said: “The timing of this initiative couldn’t be worse when there are currently an estimated 50,000 investors experiencing great uncertainty regarding existing property deals and banks being restrictive with credit for non-residents.

“Instead of spending money on an ill-advised publicity drive, the Spanish Government should be directing its efforts towards sorting out the current mess for existing residents. The feedback from our four offices in Spain clearly indicates that there is transparency in the property market, yet still there are some big issues concerning high property prices, that are discouraging potential investors.

“In Spain, liability on mortgage debt is forever.  If you have bought a 200,000 Euro property, with a 100,000 Euro Mortgage – you can’t simply send the keys back to the bank if you can’t afford the mortgage. If the bank only sold your property for 50,000 Euros – you would still owe the bank 50,000 Euros.  Not only that, but the liability of this debt passes to your immediate family when you die. This is very different to the UK, where the banks take the hit. This is the main reason
why Spanish banks have sold debt packages so well in the past.”

Many Brits bought properties off-plan in Spain, in the middle of the housing boom, some from developers who then went bankrupt. Deposits are often irrecoverable, even though their homes have never been built. Typically, those investors will try to recover their deposits direct from the bank but ultimately the purchaser will need to launch an appeal to the courts.

Despite the current issues surrounding property deals in Spain, it continues to be a popular destination for the property investor or sun seeker. Last year Currencies Direct transferred more that £200 million into Euros for deals relating to Spanish property but despite those high numbers, the company believes a large proportion of potential investors are currently waiting for the pound to recover against the Euro.

Mr Ivars-Lopez concludes: “I believe Spain will become even more popular, once the banks open the credit and reduce the prices of the property – still have in stock. We can’t deny Spain offers a high standard of living, sun and top of the range health services. If you follow professional advice, do your homework and buy wisely, you could reap the rewards of the current uncertainty in the property market as there are an estimated one million properties lying empty in Spain, so
developers will be pricing them according to market conditions.”

The six-nation tour will also visit France, Germany, the Netherlands, Sweden and Russia

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