The Latest Spanish Property News from Kyero.com

Soaring inflation has been a major news item for some months and record inflation rates are hitting countries worldwide. The main contributors to rising inflation have been the staggering surge in the price of oil and rocketing food prices. Oil prices have not just affected the fuel in your tank or the cost of an air flight but they have a roll on effect in many areas including manufacturing and services.

Spanish fishermen, taxi drivers and truckers have all staged disruptive protests over the price of fuel which has put their livelihoods at risk. Similar workers in other European countries have also demonstrated their anger and called for government assistance to help them through the crisis.

Inflation in the Eurozone hit a record 4% in June (latest figures available at time of writing). It was the highest rate recorded since the Euro was launched nine years ago and double that of the European Central Bank’s (ECB) target rate of “below but close to 2%”. If you think that sounds bad enough, inflation in Spain hit a 13-year high of 5%. A year earlier, Spanish inflation was just half this rate and stood at a more acceptable 2.5%.

According to the Spanish Institute of National Statistics (INE), transport has been the main reason for the rise in inflation over the year due to the substantial rise in the price of fuels and lubricants for personal transport equipment. Food and non alcoholic beverages came next with housing in third place because of the increase in heating fuels.

Spain’s Finance Minister, Pedro Solbes, commentated that the inflation report was “not good news”. Solbes had earlier anticipated that Spain “should end the year with inflation close to 4%.”

The latest Euro inflation figure caused the ECB to step up its interest rate a quarter point to 4.25%, the highest interest rate for seven years. Both the ECB and the Bank of England (BoE) have said that inflation rates would remain above target through to 2009 and advised against hiking salaries to cope with the situation as higher wages would stoke inflation.

The governor of the Bank of Spain, Miguel Angel Fernandez Ordonez, who is also a member of the ECB’s governing council, had warned that Spain faced the danger of a wage-price spiral due to wage indexation clauses in union work agreements.

The UK is also facing record high inflation with June’s inflation figure coming in at a 16 year high of 3.8%. The BoE had kept interest rates on hold at 5%. Its preferred level of inflation is 2%.

Many people are finding it hard to make ends meet. It is not just those on salaries who are seeing their income levels fall below their expenditure. Retired people usually only have their pension income to live on and whatever savings and investments they have managed to make. What may have seemed like a good income forty or fifty years ago when they began contributing to a pension pot could have fallen in value dramatically due to inflation. When it comes to actually taking a pension it may not be enough to provide the kind of living standard they had expected.

Reaching retirement is a significant stage in a person’s life and often brings significant lifestyle changes too. It may be that you are planning to move to Spain on retirement. Whether or not you do or remain in the UK, retirement is a point when you should review your financial situation and plan ahead. People today can live twenty or thirty years in retirement. Your investments, savings and pensions need to be looked at closely to make sure that you benefit from the most they can offer.

Inflation is probably the biggest threat to your financial comfort and survival, followed by taxation. Not only does inflation shrink the spending power of the cash in your pocket but over a twenty to thirty year period inflation can erode the value of your wealth by between 50% and 70%. You just need to think about how much items cost thirty years ago and how much they are today to realise how frightening this can be.

Many retired people like to keep their money “safe” in the bank. The stark truth is that banks are not the safe havens they have seemed to be. Banks are no longer solid institutions of reliability and respectability as recent bank crises have revealed. But perhaps more importantly, cash in the bank is vulnerable to high inflation and exposed to taxation. Even though capital held in a bank is usually protected, it does not have the opportunity to grow. On top of that, interest is taxed which can virtually wipe out the returns.

For instance, in Spain bank interest rate at 4% is swallowed by the inflation rate of 5%. The interest earned is taxed at 18%. Bank interest in the UK at 5% with inflation at 3.8% means you are earning a paltry 1.2% interest on your savings. For a basic rate UK taxpayer this is taxed at 20%.

Bear in mind that official inflation rates are misleading and are often lower than an individual’s personal rate of inflation. Official inflation rates are based on a set “basket of goods”, usually containing basic and necessary items and some fashion purchases of non basic items that are popular at the current time. Not everybody buys all these items, though, and some people, and categories of people, spend the bulk of their money on other things. Research has revealed that a retiree’s rate of inflation can be two of three times above the official rate. It is interesting to note that both the INE and Eurostat, the European Commission’s statistical agency, places Europe’s “basket of goods”, the Harmonised Index of Consumer Prices (HICP), as 5.1% in Spain.

A proven way to fight inflation is to set up a portfolio containing assets that are well diversified across a wide range of countries, currencies and industrial sectors. Your portfolio should comprise a broad mix of equities, property, bonds and cash. A portfolio such as this can be structured for your specific requirements, such as long-term capital growth, income if required and to provide for your heirs. It will be designed to combat the long-term eroding effects of inflation and to lessen the impact of taxation as well.

If you are planning on moving to Spain make sure that you talk to a financial adviser who is fully aware of investment and tax mitigation laws and procedures in both Spain and the UK. You will receive the best advice for your particularly circumstances and you should arrange a consultation preferably before you leave.

Full story from www.blevinsfranksinternational.com

The Spanish Government will buy €300m of land over the next few years to meet the demand for state-subsidised housing.

According to reports from Reuters the Spanish Government has announced that it is going to buy 300m of land over the next four years for state-subsidised housing.

However, it insists the move is not intended to bail out construction firms which are currently in financial trouble.

They reported that at a forum in Madrid, housing minister Beatriz Corredor said: Public money is not for saving companies in crisis.

"We have always said the growth in the property sector was unsustainable with housing building greater than demand."

The extra land is needed to meet the government's promise to increase the amount of state-subsidised homes being constructed from 100,000 a year to 150,000 a year.

The government will work with regional authorities to decide where the new homes will be built and which regions are most in need of state-subsidised homes.

Property companies will have an estimated 800,000 unsold homes by the end of this year and the housing minister has said the government is prepared to buy homes from the private sector for state-subsidised housing if the property is available at the right price.

Full story from www.homesworldwide.co.uk

It's that time of year again when we all get a break from the Property Pulse Newsletter (collective sighs of relief). I'll be sending out the next newsletter on September 2nd, but in the meantime, new articles will continue to be added to the pages of our news section, every business day.

If you prefer your Spanish property news to come to you, rather than you going looking for it on the Kyero.com web site, now is a good time to grapple with the beast known as RSS.

Wait, don't stop reading, I'm going to talk you through it - step by step. Really, you'll be pleased you carried on reading.

The problems with email

Before we get into How to - let's think about Why to.

Email is undoubtedly the most useful part of the Internet for many people. As a direct replacement for sending a letter, it's much better in lots of important ways. However, because everyone uses email, it has gathered some nasty parasites along the way - SPAM, viruses and phishing.

These and other annoyances impede the usefulness of email to the extent that there's no guarantee that the email you send will ever reliably arrive at its destination.

As I write this, my Gmail account contains a little under 20,000 SPAM emails - received in the last 30 days. If Gmail didn't do such a great job of detecting and hiding these messages from me, email would now be useless as a communication tool.

Some estimate the percentage of lost email to be as high at 50%. The nub of the problem is the push nature of email - the sender pushes the email to the receiver - whether or not the receiver wants it.

The quantity of paper junk mail that arrives through your letter box is regulated, to some extent, by the real costs of printing and postage. However, email is free of those costs and, as a consequence, a huge number of unsolicited commercial messages, viruses or attempts to gain access to your personal details are pushed at you as email every day.

Side-stepping SPAM

Rather than waging war on unwanted email, there is a way to completely side-step the problem. There is another approach to make sure that you ALWAYS receive the information you want and NEVER receive messages you don't want.

It works a lot like email but, because you specify the subjects you're interested in, you only see that information, and nothing else. You have complete control over what you see and you can switch the flow of information on or off at any time.

No SPAM, no viruses, no phishing.

The reason that most people don't know about this pull method of communication is that it looks complicated - and most people get scared off before they ever get to the good stuff.

You've probably heard of RSS already and, if you're like most people, you're still wondering what it is, what it's for and why you should care. That's because RSS is a part of the machinery that you just don't need to know about - like the darkest parts of your car's engine compartment or the plumbing in your house.

Just like plumbing, RSS is an essential piece of infrastructure - but you're not interested in the pipework, you want the shower, the bath, the kitchen sink - the bits that make use of the plumbing. So, for now, let's forget about RSS and look at the things that make use of it. I'm going to focus on Google Reader (because it's the one I use).

Here's what we're going to do - I hope you'll play along.

• Set up a Google Account
• Set up Google Reader
• Tell Google Reader about the stuff you're interested in
• Marvel at how much time you'll save
• If you're having trouble switching between windows while following these instructions, here's a printer friendly version of this article

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Set up a Google account. You'll see this box where you can sign-in if you already have an account, or an option to create one at the bottom.

The account creation process is pretty straightforward, so I'm going to assume that you now have a Google account, you've entered your email address and password and clicked Sign in.

Once signed-in, you'll arrive at a page showing all the Google products you could play with (there are a lot of them). For now, we're only interested in the one called Reader - just click the Reader link.

Here's the first point where you might be tempted to give up - but don't be put off by the blank screen and the messy layout - you're just one step from turning this page into your personalised single-page-view of the entire Internet - honest.

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Look for this green button on the left-hand-side of the screen and click Add subscription - this is where you tell the Reader about the stuff you're interested in.

Since you're reading this, I'll assume you're interested in the Kyero Spanish Property News, so paste this link into the box and click the Add button: http://feeds.feedburner.com/kyero_news

For now, don't worry about where that link came from - I'll show you that once you've actually made Google Reader do something useful. You can see why most people never get this far, can't you? I'm glad you're sticking with it though :)

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If all has gone well, you're now looking at a Kyero.com news article in the centre of your screen - something like this (although your article will be a more recent one).

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As you scroll down the Reader page, you'll see other news article from Kyero.com, and, as you scroll past them, Google Reader will automatically know that you have read them so that when you come back to the page, they will be hidden from view

You can also see a list of all the articles in your reader, just click the List view in the top-right-corner:

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So far, so good, but all you've really done is viewed the Kyero.com news page in a different format. The good stuff starts to happen as you add more subscriptions to the reader.

Let's say you're interested in property for sale in Almuñcéar. Go to the green subscription box on the left-hand-side of your Google reader and paste this link in there - just as you did before. http://www.kyero.com/rss/pgn1ppp20slt0srt4twn23521

Again, don't worry about where that link came from for now. Click the Add button and, with luck and a following wind, you'll see something like this in the Expanded view of your Google Reader:

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For good measure, let's add one more subscription - to show you that this isn't a Kyero thing - it's useful right across the Internet. Paste this link into the green subscription box, just as before: http://feeds.feedburner.com/nubricks-property

Now, in the Expanded view, see how the articles from Nubricks, Kyero news and Kyero properties are interspersed in your reader? That's because the reader defaults to displaying the most recent articles first. You can change that behaviour by clicking the View settings at the top of the page.

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Looking at the left-hand-side of the reader, underneath the green subscription button, you can see a list of the channels you're subscribed to.

Essentially, Google Reader works like your personalised, single-page view of the entire Internet. By selecting the subscriptions you're interested in, this single page will automatically keep itself updated.

By adding subscriptions from The BBC, The Telegraph or your favourite sports web sites, you can keep updated on all your interests by visiting a single reader page. The advantages of you pulling the information you want instead of having it pushed at you via email are;

1. No SPAM, viruses or phishing
2. No missing or lost information
3. Viewing a single page instead of many web pages
4. Complete control and anonymity

.. And all that without you needing to know about RSS, the plumbing behind all of this. All you really need to know is how to find the RSS links which we've been pasting into the green subscription box.

Here's how to find the RSS link for Kyero news. Visit the Kyero.com news page and, in the top-right-corner, you'll see a box like this:

On the news page, hover your mouse over the icon or link and you'll see the link we pasted into the Google Reader subscription box previously: http://feeds.feedburner.com/kyero_news

You can copy it by right-clicking on the link and selecting Copy shortcut. You can then switch to Google Reader and paste this link into the subscription box. Alternatively, you can just click the link to add the subscription to Google Reader or a number of other readers.

Click here to visit the Kyero results page for property for sale in Almuñécar - you'll see a box like this in the top-right-hand corner. Again, by hovering over the link and the icon you'll see the link which we previously added into Google Reader.

By now, you've figured out that you're looking for this RSS icon. Wherever you see it, you can click or right-click to add information from that page into your Google reader, or any other RSS reader for that matter.

By gradually including and refining the web pages that you subscribe to via RSS, you're essentially creating a constantly updated newspaper, unique to you. This newspaper only contains the sections you want to read, is free and stores an unlimited number of articles until you're ready to read them.

Unlike email, there's no junk to deal with and no worries about security. Compared to visiting each of these subscriptions individually, you save time and effort in accessing the articles you most want to read.

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I've only scratched the surface of what RSS readers are capable of. There's a lot more information in the help section of Google reader which will be worth browsing if you have the time and inclination.

My intention has been to get you over the initial tricky stuff that often gets in the way of people starting to use RSS - past the plumbing of how it works - and into the good stuff of why to use it.

Is email dead? No, far from it, but as a way of keeping on top of a diverse range of subjects without breaking a sweat, RSS-enabled applications, like Google Reader, are so much easier and efficient than email has ever been or will ever be.

So, during August, while the Property Pulse Newsletter takes a break, why not set up Google reader to update you on the latest Spanish property news when it suits you - rather than when it suits me to email it to you.

I hope you have a great summer - I'm certainly planning on doing so myself :)

Martin Dell, Kyero.com

Two aspects of the eurozone economy are often mixed up. One is its overall performance. The other is the divergences that at any time exist within the single currency area. The Spanish economy may be about to fall off a cliff. But Spain accounts for only 11.8 per cent of the eurozone's gross domestic product. If you look at the eurozone from a great height, a meltdown of the Spanish economy looks like a minor regional wildfire.

Overall, the eurozone economy is in reasonable shape. The latest indicators point towards a slowing in economic growth but not a recession. The European Central Bank is probably a touch too optimistic, as its own forecast has not yet fully taken account of the seriousness of the US downturn. But there are some reasons for guarded optimism. Most of the eurozone does not have a house price problem. Corporate and personal balance sheets are in good shape and credit to the private sector continues to grow at double-digit rates. This does not usually happen when you are about to hit a deflationary slump.

But what about intra-eurozone divergences? I was struck the other day by a statistic from the ECB that shows Spain losing competitiveness relative to Germany, even now. We knew this happened during the years of high economic growth in Spain and low growth in Germany. But the trend continued even when the relative positions of the two countries were reversing. One explanation is that Spanish wages are directly linked to inflation, while German real wages are still declining.

Worse, Spain's slippage comes amid the prospect of a serious downturn in its economy. Last week's collapse of Martinsa-Fadesa, a large property developer, has been a reminder, if any were needed, of the massive scale of the Spanish property crash. Serious financial and economic distress is almost inevitable. Do not be fooled by the fact that Spanish banks had virtually no exposure to US subprime mortgages. Being exposed to Spanish mortgages is probably worse.

Spain is in a more delicate position than the US or the UK because, as a member of a monetary union, the country has fewer macroeconomic adjustment tools at its disposal. The dollar and the pound have devalued in real effective terms, while Spain has one of the hardest currencies in the world. Spanish interest rates have gone up while US rates have gone down.

The good news is that Spain has some room for manoeuvre in fiscal policy, given its low debt-to-GDP ratio. But the whole structural and legal setup of the eurozone requires that, in any adjustment, most of the heavy lifting is done via the real economy. Spain is thus in danger of entering a decade of misery, with falling real wages.

The problem is that even if Spain were to try to pull itself up through competitive adjustment, it is not at all clear that this would work. I am not even sure whether it works all that well for Germany in the long run, but that is another story. Some degree of competitive adjustment is probably needed but the huge scale of the shock that is unfolding in Spain will almost certainly require a macroeconomic response that Spain cannot deliver on its own.

Yet the eurozone's system of economic governance is not designed to produce this type of response. There are no cyclical transfer schemes, only structural funds. No common rules exist on bank bail-outs. Small-minded national banking regulators even refuse to countenance the very obvious necessity of a central banking regulator for cross-border banks. The eurozone does not even have single representation at the International Monetary Fund. The economic shocks to be experienced by Spain, and by Ireland, will seriously test the eurozone's see-no-evil-hear-no-evil approach to economic governance.

I have long thought that the only way the current set-up will be changed is not through debate about future eventualities but as a result of being plunged into crisis. Eurozone finance ministers – the so-called eurogroup – are a complacent bunch. They never do anything until it is absolutely necessary. But they will act eventually. I am relatively optimistic that they will always be able to ward off the worst-case scenario, one that still excites some commentators: the threat of a eurozone break-up.

So what actions would be needed? In the very short run, a transfer mechanism to provide help for countries in severe distress. Of course, any transfers would have to come with IMF-style conditions attached. As a price for an increase in intra-eurozone solidarity, the other member states would almost certainly demand that the beneficiaries end the silly policies that got them into the mess in the first place. Spain, for example, should end the automatic link between inflation and wages. It should also end the monopoly of the one-month euro interbank offered rate mortgage, which has had a hugely pro-cyclical effect on mortgage lending and the housing market.

The one institution that cannot help Spain is the ECB. Its role is to run an optimal policy for the eurozone as a whole. Dealing with this hugely asymmetric shock is primarily a matter for politicians, not central bankers. Anybody who claims to be serious about economic policy co-ordination, such as President Nicolas Sarkozy of France or the European parliament's economic and monetary affairs committee, should therefore stop bashing the ECB for a few months and focus attention on the storm that is building up on the eurozone's western front.

Full story from FT.com

By going into voluntary administration, Martinsa-Fadesa, Spain’s biggest private house builder by assets, has left 12,578 of its clients wondering whether they will ever see the properties they have partly paid for, and worrying what will become of their stage payments.

The company has issued statements vowing not to let down any of its clients, and promising to complete and deliver all the properties it has sold off plan or under construction. But with the company bankrupt, fine words may not be enough.

So where does Martinsa-Fadesa’s bankruptcy leave people who have paid money with no home to show for it? And what are the implications for those who have taken possession of a property built by Martinsa-Fadesa? With these questions in mind, the Spanish consumer rights organisation FACUA gives the following advice, at a special section of its website, for buyers affected by the Martinsa-Fadesa bankruptcy. The advice also applies to buyers from any other Spanish developers that have run out of money.

How can I be sure that Martinsa-Fadesa will finish building work on my development?

There is no way of knowing for sure, and although the company has said that it will do so there are no guarantees. It depends upon how the situation evolves, and the decisions taken by the court-appointed administrators.

Should I carry on making my stage payments even if building work has stopped?

Yes, because if you don’t you will be in breach of contract and lose your claim to the money you have already paid.

Have any other companies linked to Martinsa-Fadesa filed for administration?

Yes, so have Jafemafe, Inmobiliaria Mar Plus, Fecler, Inomar, Town Planning Consultores and Construcciones Pórtico, all of them owned by Promociones y Urbanizaciones Martín, now known as Martinsa-Fadesa.

What happens if they never deliver the property I purchased?

All developers are obliged by law to provide bank guarantees or insurance policies to protect their clients’ stage payments in just such an eventuality. You have the right to reclaim all your stage payments plus legal interest from the financial institution providing the guarantee.

When can I reclaim the money I handed over in stage payments?

Any time from the point where there is firm proof of breach of contract on the part of the developer. For example, if the developer overruns the delivery deadline stated in the private sale contract or marketing material – at which point you have to decided if you want to carry on waiting - or if the company, or its court-appointed administrators, announce that building work will not be finished, or not finished on time, or that planning licences will not be granted within the necessary timeframe.

How do you reclaim your money?

If the deadline for delivery has been missed, and you wish to reclaim your money rather than wait any longer, you have to communicate this in writing to the developer, ideally by burofax. Point out that they are in breach of contract, for which reason you are demanding your money back, with legal interest, and that you expect your refund within a reasonable timeframe (a week, for example).

If you do not get your refund within the timeframe specified, contact the financial institution - bank or insurance company - that underwrote the guarantee, providing a copy of your burofax to the developer, and documentation to prove breach of contract on the part of the developer (your private sale contract, for example).

If the developer or its administrators have publicly announced that building work will not be finished, or not finished on time to meet the deadline in your contract, you can also use this as proof of breach of contract for demanding a refund.

How do I know which financial institution has guaranteed my stage payments?

You, or your lawyer, should have a copy of your most recent bank guarantee. Furthermore, the company behind your guarantee should be stated in your contract or on your stage payment receipts. If not, you will have to ask the developer for this information. Failing this, you may have to go to court to get this information.

What if you don’t have a bank guarantee?

If the developer has not arranged a guarantee it will have broken the law. In this situation you may have no choice but to register a legal complaint, and then line up with the rest of the company’s creditors trying to get their money back in the bankruptcy process.

If I have moved into a property built by Martinsa-Fadesa, and find a construction defect, what do I do?

Given the company’s financial situation, it may not meet its obligation to correct construction faults at no cost to you. In which case you need to claim against the other companies or professionals (or their insurance companies) responsible for the building work, who should be listed in the end of works certificate (certificado final de obra).

What if my home suffers from structural faults?

In this case, you should be able to claim on your ‘ten year guarantee’ (seguro decenal), which all developers are obliged by law to provide.

Other words of advice

Other consumer organisations point out that, if you have the option of completing, it might be a good idea to do so as soon as possible, as you are better off with a property than an I.O.U from Martinsa-Fadesa.

Also, if you don’t have a bank guarantee, the first thing to do is send a burofax to Martinsa-Fadesa demanding one.

Full story from www.spanishpropertyinsight.com

Spain has come top in a study assessing quality of life across Europe, making it prime for relocation.

Britain and Ireland have the highest average incomes in Europe, but come bottom in terms of quality of life, while Spain is at the top of the index, according to a study published by U-Switch, a British service comparison website.

As reported by Expatica, Brits pay sky-high prices for fuel, food and other essentials, while having among the shortest holidays, latest retirement age and lowest life expectancy, according to the European Quality of Life Index, presenting findings from ten European countries.

Ireland, which like Britain has seen a huge market-driven economic boom over the last decade, is even worse than Britain, coming in last in the Index by U-Switch.

"We may earn substantially more than our European neighbours but when it comes to quality of life we remain the sick man of Europe," said Ann Robinson, director of consumer policy at U-Switch.

"Soaring food prices and inflation, not to mention high property costs, are placing the biggest squeeze on disposable incomes in well over a decade," she added, noting also below-average investment in health and education services.

The study assessed 19 factors affecting quality of life, ranging from income and working conditions to healthcare, education and cost of living.

Brits have the highest average income in Europe, but pay between up to 18 per cent more for fuel and 49 per cent more for gas, while facing spectacularly high housing costs.

At work, Ireland comes worst in terms of retirement age, with an average of 64.1 years, followed by Britain on 63.2 years, compared to 62 year in Spain. Life expectancy is 78.1 years in Ireland and 78.9 years in Britain, the lowest barring Poland.

At the other end of the scale, Spaniards have the lowest average income, at an average £16,800, but low taxation and cheaper essential goods prices put them at the top of the overall quality of life indicator.

The high number of public holidays bring the average number of days holiday to 36 each year, making our average of 28 days including bank holidays look a bit meagre in comparison!

Furthermore, while England and Ireland experience the fewest hours of sunshine in Europe, Spain benefits from the most, giving them plenty of options for enjoying all that free time. They even have a longer life expectancy than us, making it to almost 80 years on average.

Clearly, when it comes to the good life, income is less important than free time, sunshine and cheap commodities, making it more appealing than ever to move to Spain.

Full story from www.homesworldwide.co.uk

Question: “I was in Denia this week to see what I can afford to buy in the North Costa Blanca, from Denia south to Albir and I found that property prices have fallen but not enough. Can you give me your opinion as to whether house prices will fall more or have they bottomed?”

Answer: As you can see from our analysis of asking prices for property in Denia, prices still seem to be increasing slightly.

If you look at a breakdown of asking prices by different sizes of property, you can also see that the increase is pretty uniform in all sizes of property.

However, I don’t believe that houses are being sold at these prices – not in any significant quantity, anyway.

Most sellers aren’t reducing their asking prices because they aren’t in any real hurry to sell. They’re happy to wait and see and are perfectly prepared to hang on to their property until the market bounces back. If, in the meantime, someone makes them a decent offer, they’ll consider it. They’re more fishing than selling. This is true throughout Spain, not just in Denia.

The prices of many new-build properties are reducing, although, not all developers are advertising their discounted prices. In these cases, the best course of action is to demonstrate to the developer that you’re a serious buyers and negotiate hard. You should definitely be prepared to walk away if the developer can’t get close to your target price.

For resale properties, you’re definitely looking for a motivated seller – someone on a timeline to sell, for whatever reason. The risk of paying too-higher-price at the moment is simply that. In time, the Spanish property market will bounce back and property prices will genuinely increase and any excess you paid for a property will be absorbed. The problem comes when circumstances change unexpectedly and you don’t have the luxury of choosing the timing of the sale of the property.

What price is the right price to pay? Even though the asking prices on Kyero.com haven’t decreased much, you can still use them as a benchmark. For example, last year in Denia, the average three-bed house was being advertised at between €303K and €310K. Assuming these prices were already inflated by 10% to provide some haggling space, these properties were probably actually selling for between €273K and €280K.

Now, factor in a 20-30% discount and you’ll be looking for 3 bed properties for sale in Denia between €191K and €224K.

Now, just because properties are listed in this search, doesn’t make them a bargain. In most towns, there are good developments and areas and bad ones. This is where your own detailed research must take-over so that you can compile a reliable first-hand opinion of what prices should be in each area. There’s no real way of short-cutting this process – other than to take the risk of paying over the odds.

Finally, don’t let the temptation of a bargain cause you to shortcut your common-sense. Always use an independent solicitor and get an independent structural survey completed. Even with a new-build property, a survey makes sense because a builders guarantee is worthless if they’re no longer in business to make good on their promises.

Industry ‘experts’ believe that house prices will continue to be suppressed in Spain for a while yet. Some predict a turn-around in 2009, others say it won’t be until 2011. Either way, I think it’s safe to conclude that prices still have some way to move yet. However, this won’t dramatically change the need to continue looking for motivated sellers and developers.

Martin Dell, Kyero.com

A further update on the Spanish Law of Vicios Ocultos, courtesy of Campbell Ferguson of Survey Spain

There is no standard contract for selling and buying resale properties, and there could be different ways of trying to avoid the responsibilities of vicios ocultos. Wording of this kind could be added to a sales contract:

• El vendedor queda exonerado de los defectos/vicios ocultos que pudieran existir
• El comprador conoce y acepta los defectos/vicios ocultos

Unfortunately, in either case, it’s not certain that these would be accepted by a consumer court.

Also, when dealing with newly built properties, the responsibility of the developer/contractor/designer is for 10 years for structural defects, 3 years for installations and 1 year for finishes.

The clock starts ticking from the date of the final completion certificate, CFO. This is important if a building has remained unsold for some time or if it is being sold again ‘as new’ by an investor. The date of the CFO, (which I understand to be the architect’s certificate and not the first occupation licence LPO), is therefore very important.

Remember: this doesn’t constitute legal advice on the part of Campbell or Kyero.com because we’re not qualified to do so. Please use this information responsibly and seek professional legal advice.

Recently, a friend of mine returned to the UK to sell his house after having rented it out for a number of years. To his dismay, he found his house in a sorry state of disrepair and the whole street bristling with ‘For Sale’ signs. A lost cause? Within three weeks, he had a full-price offer and, within two months, the purchase completed without a hitch.

Having visited the house a while ago, I know that it was nice – but no nicer than the other 20 identical houses for sale in the same street. Of course, I wrote to him and asked for details of his secret house-selling trick, and last week, I received his reply. I think it’s worth repeating here because it might help you to sell property in Spain – even at the moment. Are you ready to learn his secret?

“No tricks, I’m afraid – just a bit of old-fashioned marketing (the real kind: thinking about the market). The estate agent thought that our likely purchasers would be either a first-time-buyer / young couple, or a recently separated woman with young-ish kids. We guessed that either of these would be busy types (couple both working, a singleton with kids to get to school, and a job).”

“We also thought that we’d be selling to a woman so we: replaced the kitchen and all the appliances; repainted the inside and outside of the house; replaced all the carpets, reinstated the third bedroom and swept the chimneys. We figured that it would be essential that our buyer be able to complete on a Friday, move-in over the weekend and have the kids ready for school on Monday.”

“We left the garden ‘to do’ other than planting some border flowers – which came out on the same day that our recently separated mother with her two kids, aged 7 and 10, moved in.”

Technically, my friend didn’t stand a chance to sell his home quickly and at full price because there were so many other houses available (which weren’t selling) and the market was worsening by the day. However, by thinking like a buyer and thinking about the buyer, he was able to make his house the ‘one’ that got sold. If all his neighbours had taken the same approach, there’s every chance that he wouldn’t have made the sale – but they didn’t.

My guess is that his neighbours reasoned something like this: “It’s a bad market so I don’t want to invest any more in this property than absolutely necessary. If I get a buyer who’s serious, I’ll take care of the bits and pieces which need tidying-up then.”

If I’m right, their attitude of happy mediocrity made my friend’s house stand out like a beacon so that it was the only possibility. In fact, the others probably excluded themselves quite quickly for this particular buyer – under time pressure to complete and move in to a fully functional family home.

Now, your ideal buyer will probably behave differently because they’re probably buying a second home. If you’re currently trying to sell a property in Spain, have a serious chat with your estate agent. Ask him or her who ‘normally’ buys properties like yours in your area and for what reason. Get a handle on your pool of potential purchasers – where do they come from, what concerns them, what’s important to them?

If your estate agent can’t help you with this – find another estate agent and repeat the process until you’re confident you have a working profile of who might be in the market for your property. Now, that you know what’s important to potential buyers, look for the common themes in terms of what needs doing to distinguish your property from all the rest. It might be some basic decoration, or something to do with the outside space, or whatever. You’re looking for the handful of things that all of your potential purchasers will value.

At this point, resist the thinking, “Hmm, I don’t really want to throw more money into this property, especially now when the market’s so bad”. You certainly don’t want to be splashing home improvement money about with abandon but if you’ve done your buyer analysis correctly, these are the tweaks which will allow your property to rise to the top of the pile. Houses ARE being bought and sold – and yours could be one of them.

Once you’ve completed the home improvements, make sure that all of the marketing material is updated to reflect these new facts. Take new (and professional) photos, speak directly to the needs of the buyer you have identified.

Shouldn’t your estate agent be doing all this FOR you? In my opinion, they should be doing this WITH you – but I’m confident that if you initiate this conversation, you’ll quickly find out whether or not you’re with the right estate agent.

Either way, if you actually have a stab at thinking like a buyer, you can’t help but improve the odds that your property will be the one that’s purchased – because most sellers will do absolutely nothing at all – just like the neighbours of my friend – you know, the one who sold his house.

One last thing: Reading the comments at the bottom of this article entitled 25 tips to sell your home in a downturn, clearly, the price must be right too.

Martin Dell, Kyero.com

European expatriates in Spain's Valencia region who were under threat of losing free access to healthcare have won a partial reprieve. Restrictions announced last month on the right to state healthcare provision were aimed primarily at non-working expats below pension age.

From June 5, foreign nationals not contributing to the Spanish social security system lost their right to healthcare in the region unless they had one of two forms:

• the E121, issued to British men at 65 and women at 60; or

• the E106, extending access to state health services for up to 2½ years after an individual ceases working.

However, the British Embassy in Madrid advised individuals affected to buy private medical insurance.

Consternation was widespread because some expats would not have budgeted for health cover before moving to Spain. But greater concern was felt by those who could not get private cover because of an established chronic ­illness, such as heart trouble, diabetes or asthma.

The situation broadly ­paralleled that in France last year, when President Nicolas Sarkozy made private insurance mandatory for expat early retirees.

The move prompted an outcry from the expatriate community, threats of legal action and diplomatic exchanges between London and Paris.

Mr Sarkozy got his way in the long term, but those already in the system were allowed to continue.

Valencia too has moved to compromise. It is offering early retirees continued access to its hospitals and clinics in exchange for a monthly ­contribution. Crucially, there will be no discrimination against those with pre-existing­ conditions.

In addition, Valencia has deferred implementing the plan until January 15 next year. Anyone holding a health card, or SIP, due to expire before the January deadline will have it extended.

Valencia in essence will be running a premium-based state medical insurance scheme for certain expat ­categories, but without penalising sufferers with chronic diseases.

The big unknown is the size of the monthly contribution, a premium by another name. However, the British Embassy said it had been assured that the sum would be "reasonable and affordable".

The embassy emphasised that expats who had other means of accessing the health system would be excluded from the new arrangements.

Its statement said: "Anyone who renewed their SIP card before June 6, 2008 will have the full 12 months' cover until the card expires - eg, if you renewed your card or joined the scheme in May, you will have cover until May 2009."

The embassy said the regional government believed that about 1,600 Britons were affected.

Chris Barkell, the marketing director of insurer Exeter Friendly Society, which is active in the region, was not surprised by the crackdown.

He said many non-working expatriates under retirement age were not contributing to the health ­system and were gambling on using a European Health Insurance Card (Ehic). "They have been on a free ride," he said. "The Ehic is intended to cover emergency medicine only."

Full story from telegraph.co.uk

Spain's finance minister Pedro Solbes has stunned the markets with an admission that his country faces the worst economic crisis in its history as the full effects of the property crash spread through the economy.

"This crisis is the most complex we have ever lived through given the plethora of factors on the table at the same time," he told Punto Radio in Madrid, breaking with past efforts to put a reassuring gloss on events.

Mr Solbes said the Madrid bourse had suffered an "earthquake", crashing 27pc since the start of June. He blamed the toxic cocktail of high oil prices, the global credit crisis and the sharp slowdown in the key export markets of North America and Germany.

The comments follow this week's bankruptcy of Martinsa-Fadesa, Spain's biggest corporate failure. The property developer - with an empire of housing estates, hotels, shopping malls and hotels - collapsed after failing to refinance €5.1bn (£4bn) of debts. The company's demise was a textbook story of aggressive over-expansion at the top of the cycle, driven by high debt gearing. It has €11bn of assets.

Mr Solbes has pursued a rigorous "no bailout" policy, saying Martinsa-Fadesa took "excessive risks" and must now face the consequences. He has reportedly clashed with cabinet colleagues, who are now searching for any means to stop the downward spiral in the economy.

El Pais reports that house prices crashed by 20pc in the second quarter compared with a year earlier, based on 183,000 completed transactions.

The Martinsa-Fadesa collapse has sent tremors through the whole property and construction sector. The share price of giant developer Sacyr has halved over the past month.

The two banks with most exposure to the Martinsa-Fadesa are Caja Madrid, at €900m, and Banco Popular, at €400m.

Goldman Sachs has issued "sell" recommendations on a clutch of Spanish banks, including Bankinter, Banco Popular and Banco Sabadell, warning that the sharp turn in the credit cycle could prove worse than the recession in the early 1990s. "The consumer is more leveraged today than in any of the previous cycles," it said.

The ratings agency Standard & Poor's has not yet taken a decision on whether to downgrade Banco Popular and Caja Madrid.

In reality, this is unlikely to be the worst economic crisis in Spain's history. Philip II defaulted on his sovereign debts three times in the 16th century after he bankrupted the Spanish Empire to pay for his Counter-Reformation wars against Protestants. He crippled the Italian banking system in the process - much to the benefit of London and Amsterdam.

Full story from telegraph.co.uk

A recent article in the Spanish daily ‘El Pais’ illustrates the excesses of Spain’s recent property boom.

Using the example of Seseña, a massive new urbanisation of 13,500 apartments in the province of Toledo (Castilla-La Mancha) south of Madrid, the article shows that much of Spain’s recent property boom has been driven by speculation.

The developer of Seseña, Francisco Hernando (also known as El Pocero, or Mr. Drains), is now struggling to sell in competition with his previous investor clients, many of whom are offering big discounts to dump their investments. So far only 2,500 of the properties at Seseña have a first occupation licence, and only 750 people live on the urbanisation.

But Seseña is just the tip of the iceberg. In the Castilla-La Mancha region as a whole, 123,000 new properties have been built in the last 3 years, of which only 39,000 have been sold, implying an overhang of around 84,000 surplus new properties. That is 2 out of 3 of all new properties built in Castilla-La Mancha since 2005.

The number of housing starts in the region has risen dramatically in recent years: 31,000 in 2005, 37,500 in 2006, and 47,500 last year. But during that time, demand kept stable, at around 12,000 sales a year.

According to Gonzalo Bernardos, a professor and property sector specialist at the University of Barcelona, speculative developers were banking on rising property prices in Madrid driving buyers further and further away from the capital. “They thought that rising prices in the capital would drive out buyers,” the article quotes Bernardos as saying. “They bought land on the cheap planning to sell expensive flats, thinking that demand would be infinite. Now the excess of supply is enormous.”

It’s a similar story on the Spanish coast, where hundreds of thousands of holiday homes have been built for a supposedly bottomless supply of northern European buyers. But this article shows that the problem is not limited to the coast.

Full story from www.spanishpropertyinsight.com

Lehman Brothers and other investment banks, private equity firms and hedge funds are lining up to buy distressed Spanish assets as the steep economic slowdown offers investors big discounts.

Lehman has purchased stakes in distressed senior bank debt, the law firm Ashurst said recently, providing a rare glimpse of insight into the normally secretive world of such transactions.

The U.S. bank also bought stakes in a defaulted senior bank debt agreement, Ashurst said in a brochure on distressed transactions, in which investors take on parts of troubled companies at a discount.

Such deals - not normally disclosed by banks wary of showing their positions - also include the purchase by the U.S. private equity firm Apollo of a portfolio of receivables from two Spanish banks, Caixa Galicia and Banco Popular, according to Ashurst.

"We expect more nonperforming loan sales to follow," José Christian Bertram, a partner at Ashurst, said at a presentation to investors about Spain's distressed market in London last week.

Lehman, Apollo and Carval all declined to comment.

Spain has become the center of focus for Europe's restructuring bankers, such as Rothschild, Lazard, Houlihan Lokey, Goldman Sachs and Cyrus, eager for business after years of dearth in distressed deals.

"We think Spain is going to be a very interesting market for opportunistic players," said Antoine de Cockborne, an associate at City Property Investors. "This is the start of a very difficult situation. It will hit the bottom. We're looking for discounted assets."

The Spanish economy is faltering after a decade-long boom that saw house prices almost triple. Spaniards who borrowed against the rising value of their homes to buy cars and second homes are struggling to pay their bills.

The global credit crunch and record oil and food prices are squeezing Spanish consumers and forcing local shops to close down. Empty stores with "for sale" signs have become a common sight around the country.

Investors in distressed debt are also looking at firms such as Cortefiel, a clothing retailer bought by the private equity firms PAI Partners, CVC and Permira in 2005. Its debt trades at about 50 cents per dollar.

Retailers and service providers face tough times as customers leave unpaid bills. Investors may buy the bills for as little as 10 percent of face value, offering those who risk it an attractive yield.

Bank of America and WestLB bought a portfolio of receivables from Vodafone in Spain worth €190 million, according to Ashurst.

But chasing assets in Spain can be harder than investors think, because servicers - agents in charge of recovering debts - are not as sophisticated as in other countries, said Juan Hormaechea, a partner at Ashurst.

"The services market in Spain is underdeveloped; they are slow and not used to mortgages," Hormaechea said. "Some buyers buy portfolios without knowing that the servicer will become the bottleneck."

Prices are another barrier, as distressed assets may have to fall still further to attract investors.

"At the moment, we have more sellers than buyers," Bertram said.

Full story from www.iht.com

The number of 500 Euro notes in circulation in Spain, known locally as ‘Bin Ladens’, has declined in line with the Spanish property market, suggesting a quirky gauge for measuring activity in the Spanish property market.

Locals call 500 Euro notes ‘Bin Ladens’ because, when the Euro was first introduced, everyone had heard of them, but nobody had actually seen one.

That didn’t last long. At the height of Spain’s property boom, you were far more likely to see a ‘Bin Laden’ in Spain than in any cave on the Afghan-Pakistan border. By last July one quarter of all 500 Euro notes were circulating in Spain, despite Spain issuing fewer of them than any other Eurozone member when the currency was first introduced. Nor does the size of Spain’s economy justify the presence of such a large proportion of the Eurozone’s highest denomination note.

So why so many ‘Bin Ladens’ in Spain? Because corruption in the property sector, along with a popular practise of paying for property with cash under the table, creates a lot of demand for high-denomination notes. ‘Bin Ladens’ make it easier to handle large quantities of cash, converting them into the currency of choice for bent town hall officials, money launderers, organised criminals, and fast buck property speculators, all of whom piled into Spain’s property boom.

But since last July, 4 million ‘Bin Ladens’ have dropped out of circulation in Spain, according to a recent article in the Spanish press. This has coincided with an alarming slump in the Spanish property market, and a government clampdown on town hall corruption. In the absence of reliable Spanish housing market statistics in Spain, you could do worse than look at the number of ‘Bin Ladens’ knocking about. Call it the Spanish property market ‘Bin Laden’ index.

Full story from www.spanishpropertyinsight.com

This week, I received another comment on my original Vicios Cultos article. Just as I mangled the 'ocultos' part, it seems I also corrupted the translation of ‘vicios’. Thanks to Roger Cooper who kindly set me straight (again) with these words:

“Vicio does, of course, have the same primary sense as English/French ‘vice’. But, in context, the meaning can be quite different. Just as our ‘vicious’ has moved away from any strict link with ‘vice’, so, in modern Spanish, ‘vicio’ can mean simply ‘defect’, ‘fault’, with no suggestion of moral turpitude."

"A speech defect, for example, is ‘un vicio de diccion’, without any suggestion that, say, a stammerer is immoral. It even has an ironic slang meaning, so that ‘de vicio’ usually means ’’brilliant’, ‘phenomenal’, just as ‘wicked’ does in our young people’s slang, without any suggestion of evil”

Phew, it’s good to finally get that moral turpitude out in the open.

With this 190th newsletter, we’re getting close to the 200th issue of Property Pulse – hard to believe I’ve been sending this out for almost four years now. The actual 200th issue is scheduled for October 21st – due to the summer holiday break.

It’s interesting to take a quick look back on four years of news articles. For example, there were very clear signals a long time ago that the Spanish property market was all set to change. As early as the middle of 2005, we had good cause to suspect the hype around the property market boom.

Also in mid 2005, the Valencian Land Grab Law was all set to disappear. To be fair, the name of the law has changed but we’re still suffering from some underhanded behaviour in that region of Spain as this long list of articles demonstrates.

It was in early 2006 that corruption in Marbella first hit the news. Even though that particular location seems to be addressing its issues, it is, of course, still coping with the fallout from that spate of publicity. Just last month, a similar set of circumstances hit the news concerning Estepona – just 20 minutes down the coast from Marbella.

Still on the subject of illegal building and corruption – this time in Catral, it’s easy to see how today’s story is linked to similar articles stretching back to the middle of 2006.

The perspective I gain from this quick excursion down memory lane is that it will take a while yet for Spain to clean up it’s image – at least as far as property is concerned. Despite moves to operate more transparently, Spain’s system of funding local councils via the process of granting building licences is doomed to perpetuate the current cycle of corruption.

Similarly, the election process in Spain often places opposing political parties in power at regional and local levels. When a regional government instigates a witch-hunt into corruption at the local level, it’s a safe bet they won’t be concentrating on towns where their own political party is in office.

Long term, I am optimistic that Spain will get the better of these vices and defects in their political and legal machinery – because they are doing more than simply paying lip-service to the ideals of transparency. Now that its property market is taking a beating, this would be an ideal time to push through new legislation to systematically eradicate corruption and inefficiency in the housing system.

I’d increase tax revenue with a massive clamp-down on black money deals. This would also produce a core of believable data about the actual value of housing in Spain. With less money changing hands illegally and an official handle on house prices, my guess is that the market would recover more quickly and more predictably.

In the meantime, don’t think of Spain as the accident black spot of Europe – it’s not, not by a long stretch. The issues Spain is tackling are the same in all ‘developing’ countries – they take years to solve and move beyond. If you’re thinking about buying property in Spain, use an independent lawyer and an independent surveyor, take your time and do your own homework.

This approach was true 4 years ago – and it will probably still be true in another 4 or 40 years from now. Let’s hope by that time I’ve found something new to write about in Issue 2,000 of the Kyero.com Property Pulse Newsletter.

Martin Dell, Kyero.com

The municipality of Catral, in the Vega Baja region of the Valencian Community (South Costa Blanca) is infamous for its problem with illegally-built homes, 1,300 of which were built and sold to Britons and other foreign buyers between 2000 and 2007. The problem was so bad that 2 years ago Valencia’s regional government suspended Catral’s urban plan as a first step towards sorting out the town’s urban planning chaos. But now, almost 2 years later, the Spanish press reports that no further progress has been made, and owners of illegally built homes remain trapped in legal limbo.

The town hall, now run by the right of centre Popular Party (like the Valencian Government), can at least point to some evidence of an effort to address the problem. Over the last couple of years it has drafted 4 urban plans, 3 of which were rejected, and the latest of which will be considered by the Valencian government this month. The Valencian government, on the other hand, has done nothing other than issue 217 charges for urban planning infractions.

Aurelio David Albero, Catral’s Mayor, is confident that the latest plan will be approved, but has no idea what it will cost.

“Whatever it costs [to legalise homes], our objective is that builders, developers and owners will foot the bill, but not the owners of legal properties, nor the farmers that have kept out of the urbanisation business,” Albero told the Spanish press.

Albero also admits that illegally built homes are a burden on the local economy. “They are owned by residents who don’t pay any taxes, but who enjoy services such as rubbish collection, postal services, health and education, all of which has pushed the town hall into debt of 1.8 million Euros.”

Whatever the final cost of legalising homes in Catral, that end appears as far away today’s as it did 2 years ago.

Full story from www.spanishpropertyinsight.com

Expats are facing the demolition of their homes in the latest town planning scandal to hit Almería province. Around 19 properties, all lacking building licences and first habitation certificates, are facing the bulldozers in the El Fas district of Cantoria.

Although the case has been going through the courts for almost two years residents only got to hear of the news late last month when they were served with a summons to attend the Justice of the Peace and were asked if they wanted to take part in proceedings against the accused.

The public prosecutor says the builders sold the properties to third parties despite knowing they had been built on non-urban land and without permits. He also reminded the judge that a court had ordered a halt to construction work in June 2006. Acting on behalf of the government, he asked for the houses to be demolished and for the expat home owners to be compensated.

Expats are claiming the local mayor, Pedro Llamas García from the right-wing Partido Popular (PP) party, and the solicitors who initially represented them, repeatedly assured them that the properties were all legal. An expat spokesman for the Cantoria Residents’ Association, who wished to remain anonymous, said they had been “led up the garden path” by builders, solicitors and the council, and suggested the latest scandal could be the tip of the ice-berg.

He said: “Around 200 other properties in Cantoria are going to be in the same position. We bought in good faith and it turns out we were lied to and defrauded by everyone.”He added bitterly: “We were viewed as sheep ready to be fleeced.”

At the centre of the case are two individuals accused of fraud. Defendants Karen Smit and Julio Piñeiro, who are named as the developers of the El Fas complex, have been charged with selling illegal properties. If found guilty the two could face up to two years in prison and fines of up to 22,000 euros each.

The charges are the result of an investigation in 2005 by the Guardia Civil’s environment protection branch, Seprona. Costa Almería News has had access to court documents related to the case dating as far back as 2006. Giving evidence at a preliminary hearing, Ms Smit admitted the homes in El Fas had been built without a licence. Sr Piñeiro, also giving evidence, said he spoke to “some people at the council who verbally agreed to the construction of the homes” and that ‘taxes’ had been paid.

In a further twist, Ms Smit is also the partner of Daniel Poetsema, who appeared seventh in the list of candidates for the PP at the last local elections and who is allegedly behind the sale of the properties. Controversially, Mr Poetsema signs himself as deputy mayor in all correspondence to expat residents, even though he is not a member of the ruling council.

Mr Poetsema has led an intense campaign to try to reassure the troubled expat community that “there are no illegal buildings in Cantoria”, claiming the area is exempt from town planning restrictions imposed by the Junta because of a local by-law. However, a legal source consulted over this matter dismissed Mr Poetsema’s claims as “rubbish”.

In another development, PP mayors and councillors from 18 municipalities, including Cantoria and Partaloa, meeting this week to discuss town planning scandals in Almería claimed they were being targeted by the socialist-led Junta for belonging to an opposition party. In a statement released after the meeting, the PP said the Junta “only applied the law strictly if the council had a different colour to the Socialist party (PSOE)”.Neither Mr Poetsema nor Sr Llamas García were available for comment.

Full story from Costa Almeria News

Mass urbanisations and high-rises are becoming less popular as buyers search for environmentally conscious homes.

The maturing of the Spanish real estate market and movements made away from mass urbanisation and high-rise property development may well be impacting negatively on the rate at which such formerly constructed accommodation is being sold, but in direct parallel it is having a positive effect on the quality of homes being constructed for the lifestyle market.

The Spanish property development frenzy of the last decade that resulted in massive resort-style developments being constructed for those who wanted an accessible holiday apartment in the sun, or an affordable fly-to-let investment purchase, are proving less popular these days as other property markets open up and offer a more affordable choice buyers.

Meanwhile, the evergreen and enduring appeal of Spain as a stunning, tried and tested lifestyle destination for retirees, relocating expatriates and those in search of the good life means there is now an emerging trend in those wanting to buy quality Spanish property.

There has been a sharp and direct increase in consumer demand for homes in Spain constructed in an environmentally conscious way, for property for sale away from resort developments and for properties that allow buyers to truly realise their dream of living an idyllic lifestyle in a fantastic overseas destination where the natural landscape, fabulous climate and excellent quality of life that they are buying into are enhanced by a spacious, well-constructed home, located in an appealing destination.

This in turn has led to new areas of Spain becoming popular with those who want to buy into unspoiled regions where local government laws and policies have protected the natural landscape.

One such area of Spain especially popular with buyers seeking the good life is Murcia. Planning laws define different zones in order to protect the pine forested mountain ranges and the vast majority of areas around them.

If developers are looking to build urbanisations there is an abundance of land which is designated for this purpose. This land is typically near to towns, cities and motorways.

As you head towards the stunning national parks the zoning changes to extremely low density so you can only build one property per five acres of land. The idea behind this intelligent approach to planning is to avoid the mistakes made in other parts of Spain, maintain the natural appeal of the region, and preserve the beauty and attraction of Murcia for generations to come.

Mike Hamilton, managing director of local real estate agency Casas de Lorca comments: "Many developers are missing the very real point that increasingly consumers require environmentally-conscious homes with such things as solar power, eco-friendly water conservation methods and where the environment into which they are moving will remain unchanged and unspoiled.

"They want spacious properties with large gardens, they want these properties to be built in areas of outstanding natural beauty and they are not willing to compromise.

"For the developer astute enough to recognise this demand and sympathetic and intelligent enough to embrace government policies rather than try to avoid them, there is great opportunity to be had in terms of constructing fabulous real estate in an ethical manner that is hugely sought after.”

Some properties in the region come with a five-acre plot of land, allowing purchasers to become virtually self-sufficient if they want to. Additionally they have almond trees or vineyards which reduce CO2 and also enhance the natural habitat for flora and fauna. Solar energy hot water is becoming increasing popular, as is solar pool heating.

Full story from www.homesworldwide.co.uk

A bit of good news for once. The Spanish property sector has made some progress towards cleaning up its act, according to the latest bi-annual report on real estate sector transparency published by Jones Lang LaSalle, an international property consultancy.

In the 2008 edition of Jones Lang LaSalle’s Global Real Estate Transparency Index, which measures corruption in real estate sectors worldwide, Spain has risen two place from 18th in 2006 to 16th today. As a result, Spain is now rated 10th in Europe, and 16th in a world ranking of 82 real estate markets.

Corruption is not the only variable measured by the index, which also takes into account other factors such as legal frameworks, respect for private property, levels of professionalism, and the availability of reliable market statistics. The improved availability of information, plus greater professionalism in the Spanish property sector lie behind Spain’s rise in the rankings.

The Index, which Jones Lang LaSalle says provides a rigorous framework for comparing the level of real estate transparency across world markets, shows that nearly half of the countries surveyed in 2006 demonstrated a significant improvement in their transparency score two years later.

“Transparency levels globally are improving as governments seek to streamline regulatory and legal hurdles to aid cross-border movement of capital and corporate facilities,” says a press release from Jones Lang LaSalle. “Only Venezuela posted a lower transparency score this year compared with 2006, principally due to changes in government regulations and new taxation policies targeting foreign investors.” In keeping with historical results, Anglo-Saxon real estate markets remain the most transparent in the world. Top of the ranking are Canada, Australia, the US, New Zealand, and the UK, in that order.

Full story from www.spanishpropertyinsight.com

British consumers are still keen to buy property in Spain, even if the current market conditions are forcing them to delay their purchase, an industry expert has said.

Mark Stucklin of Spanish Property Insight explained that there was still demand for property in Spain from people in the UK and some were even using the current market conditions to their advantage.

He explained that the recent reports about the failure of the investment market in some parts of Spain had put an end to the phenomenon of "speculative herd buying". Instead, people who genuinely wanted to own a holiday home in the country were "doing their research".

"There are still people with money who want to buy in Spain for their own reasons, and if they’re going to buy they’re going to use this market to get better quality and they can now buy at a better price than in the last few years, so in a way they are already getting better value," Mr Stucklin added.

In particular, the expert suggested that people were still considering "the posh part of the Costa Brava, the northern Costa Brava, [and] the Balearics in general" as places to buy in Spain.

Full story from www.moneyhighstreet.com

Last week, I mentioned the Spanish law of Vicios Cultos – and got a fair bit of feedback about it.

Embarrassingly, I mangled the real title of the law “Vicios Ocultos” – meaning “hidden vices”, with my “Vicios Cultos” – meaning “cultured vices” – a rather different meaning. Thanks to those who set me straight.

I also heard from a property buyer for whom the law could be extremely useful:

“I have just bought a small Spanish house which could be described as a ruin. I was told by the agent that the cracks in the wall were nothing and could easily be fixed. The day I purchased the property, a renovator caught up with me and said there were urgent repairs needed in the basement and also the roof required propping up and fixing. I paid him €2000 to do so. I then sent a man who took a structural engineer with him and yesterday I was told it is positively dangerous and should be pulled down. The so called work done was just a patchup job.”

Clearly, in this case, the buyer should examine the contract of sale to see if the “sold as seen” clause was included – something for a lawyer to decide. If not, and if the purchase was made less than 6 months ago, they may have a claim under the “Vicios Ocultos” law against the seller for compensation or a full refund.

With the benefit of hindsight, a safer course of action would have been to engage the services of a structural engineer before completing on the purchase. This advice seems so obvious yet most people skip this step when purchasing property in Spain (I did too).

Jeff Greensmith of Fincas Direct emailed me to say that he always advises buyers to have an independent survey done. Every town or village has at least one municipal aparejador/arquitecto tecnico who will do so for a relatively low fee.

Just as it makes sense to use an independent lawyer to represent your interests in a property transaction, it also makes sense to use an independent surveyor. The cost of being diligent in selecting and engaging these professionals before completing the sale will vastly outweigh the time, expense and hassle of attempting to rectify a problem afterwards – even if the law of “Vicios Ocultos” is applicable.

Martin Dell, Kyero.com

According to a recent study by Currencies Direct, Spain continues to top the list of retirement hotspots for Brits who actually want to enjoy some sun in their sunset years. And it’s not hard to see why.

But Spain’s allure is not limited to pensioners. Indeed, it consistently ranks as the second most popular destination for British émigrés of all stripes. Only Australia attracts more. And while a life Down Under may have its attractions, it’s also a lot further away if you fancy a visit home to catch up with friends and family.

So if you’re considering joining the hundreds of thousands of people that up-sticks each year for a life overseas, then Spain could be the ideal place. Here are 10 reasons why:

1) Sunshine

What can be more appealing for a Brit than the promise of a plentiful supply of year-round sunshine? And much of Spain is well-endowed with those golden rays that prove so elusive at home.

Do your research before you pick a location though. While the southern region of Andalucía has an enviable winter climate, it can be murderously hot in the summer. By contrast the north and northwest see a lot of rainfall, with a climate and landscape more akin to Cornwall than that of Mediterranean Spain. Meanwhile, Madrid and the central regions boil in summer, but can get icily cold in the winter.

2) Outdoor Activities

Sunshine and warmth – perfect ingredients for enjoying the Great Outdoors, whatever your interests happen to be: sailing, cycling, hiking, golf, painting, or simply splashing around at the beach. And in the winter there’s decent skiing in the Sierra Nevada mountains in the south, or the Pyrenees in the north.

3) Natural Beauty

Unfortunately, for many people Spain has become synonymous with overdevelopment and tawdry beach resorts. But that is by no means the whole story. Yes, parts are overdeveloped nightmares. But for those that want them there are still plenty of low-key towns and unspoilt stretches of coast to be discovered.

And once away from the main tourist areas of the Mediterranean there is a surprising diversity of landscapes: from the wild coastline of Galicia to the remote expanse of Extremadura, the lush forests of the Basque country, and the majestic Picos de Europa or Aigüestortes national parks.

4) Cost of living

Since the introduction of the euro in 2002 Spain has become noticeably more expensive, as businesses of all descriptions took the opportunity to round up their prices. Nevertheless, prices for food, alcohol, petrol and property – to name just a few items – still compare favourably to those in the UK.

5) Food and Drink

Spain may not be a gourmet hotspot like France or Italy, but there is more to be said for it than just paella and tortilla (although both are delicious). And as you would expect from a country of such size, there is a great variety of styles between the different regions, with the Basque country’s cuisine having a deservedly high reputation. Likewise, while a nice glass of cava or a Rioja red are not to be sneezed at, Spain’s wine industry has far more going for it.

6) Pace of Life

Spain is renowned for its siestas and mañana approach to life. And while the pace may be picking up in the cities in particular, generally the Spanish follow a more relaxed approach to the clock. Great if you have time to go with the flow!

7) Health Care

The Spanish state health care system is among the best in the world. Indeed, the World Health Organization ranked it seventh overall when it compared countries’ health services for its annual report in 2000 (World Health Report 2000 – Health Systems: Improving Performance). And in my experience (having had two children here, one with severe allergies) its reputation is deserved: staff are well-trained, the facilities are modern, well-equipped and clean, and treatment waiting lists are short.

8) Family Life

In general, Spanish families tend to be close knit, and children oriented. It is common to see families spanning three or four generations sitting down to lunch together each day. Children are common sights in restaurants in the evenings too, rather than being left at home with the babysitters while the adults go out. And wherever they go, the children are the centre of attention, for doting family members and strangers alike (which is great if you happen to have some yourself).

9) Fiestas

Fiestas are a central feature of Spanish life. Famous extravaganzas like the bull-running in Pamplona (San Fermín), Sevilla’s Semana Santa and Feria de Abril, or Valencia’s las Fallas are well worth a visit if you can get there. But each village, town and city has its own monthly schedule of saints’ days and feast days too, which can be just as entertaining and intoxicating. And because they have specific significance to the local community they are likely to be more meaningful and entertaining for you as well.

10) Cultural Riches

Spain’s glory days as a world-conquering empire may be long gone, but a wealth of history and culture remain. There are the magnificent art galleries of Madrid and Barcelona, and architectural jewels such as the Alhambra in Granada, the cathedral of Santiago de Compostela and Bilbão’s Guggenheim museum. Or you can simply soak up the atmosphere with a stroll around one of its many beautiful cities: Salamanca, Toledo, León, Girona, Sevilla …

Paul Allen is a freelance journalist and writer who has lived in northern Spain since 2003. He is the author of “Should I Stay Or Should I Go? The Truth About Moving Abroad And Whether It’s Right For You,” a comprehensive e-book guide for people seeking advice on whether or not to move abroad. For more details about the book, and free information and advice on moving and living overseas, visit his website at www.expatliving101.com

Full story from www.expatfocus.com

There is an end in sight for the problems in the Spanish property market, experts have predicted.

Spain has been hit hard by the credit crunch and house prices have fallen in many parts of the country.

However, the country's housing minister Beatriz Corredor this week gave an optimistic assessment of the market to the senate, reports Reuters.

"Forecasts by international and national organisations, as well as the government, point to an economic and property sector recovery beginning in the second half of 2009," she said.

Earlier this month, Ms Corredor stated that it is currently a good time to buy in Spain because the supply of property is plentiful, meaning purchasers are in a position to find a bargain.

Paul Collins of property advice website BuyAssociation recently echoed that view, explaining that investors who are in a position to move quickly can take advantage of the slowdown to secure a "great deal" in Spain.

Full story from www.ready2invest.co.uk

The provincial government in the Costa Blanca is changing the law because it claims elderly people who have made their home in the region are placing too high a burden on the health system.

The move has prompted fury in the expatriate community on the Mediterranean coast. It feels it is being victimised by the Spanish, following years of clashes with authorities over the country's planning laws.

Many people moved to Spain on retirement believing they would be covered by the country's medical system. Now they are being forced to take out expensive private insurance.

The decision by politicians in Valencia has caused uproar in the area and the British consulate in Alicante has been deluged with calls from concerned expatriates.

Bob Houliston, 71, a retired diplomat who is now president of the Claro political party, which represents the 20,000 expat residents of the Orihuela area near Alicante, said the move could have "serious consequences".

"The timing of this decision could not have been worse. Now is not the time to cause individual hardship and widespread uncertainty which can only add to the image problems the region has to contend with," he said.

"It should surely be possible for the United Kingdom and Valencia government authorities to find solutions for the relatively small number of British citizens living in Valencia who could otherwise face real hardship."

In 2002 the provincial government offered free healthcare to all expatriates of all EU nationalities in a bid to get foreign investment in the area's property market, which at that time was booming. The market is now experiencing a similar downturn to that being seen in the UK.

The ruling only applies to people who took early retirement and moved to Spain, mainly aged in their fifties. Older retirees and individuals on long-term incapacity benefit are unaffected, as they are covered under a reciprocal healthcare agreement with the UK.

A spokesman for the regional health ministry said: "It is costing us an extra €1bn (£790m) annually to look after a million new residents as well as long-stay tourists, and our services are at saturation point. Some come to Spain to have their heart operation or hip replacement here at a better standard and more quickly than in their own country."

The expatriates however, hope to fight the ruling. In France last year, expatriates successfully had a similar plan partially overturned, so it now only applies to new arrivals.

Full story from www.telegraph.co.uk

In a move that some have described as revolutionary for golf-happy Spain, the regional government of Andalusia recently approved a sweeping new law restricting the development of golf courses.

The regulations, approved in February after months of heated debate, dramatically limit the number of houses that a developer can build around a course and require new courses to use recycled water for irrigation.

Throughout the country regional governments are approving similar measures in what is largely seen as a backlash against rampant golf course development. More than 100 courses have been built in Spain in the past eight years, most accompanied by high-density residential developments targeting foreign buyers. “I don’t have anything against golf,” said Juan Area, editor of El Observador, a newspaper here. “But I think there are too many golf courses.”

In Andalusia – home to the popular Costa del Sol, which is sometimes called the “Costa del Golf” – there are 118 courses, accounting for more than a third of the courses in the country. Nine new courses opened in the past four years alone, according to data from Real Federación Española de Golf, an industry group.

Critics say the golf courses were used as a Trojan horse, employing fairways and greens as an excuse to build rows of villas on environmentally sensitive land. “Probably in the last 10 years there have been more houses than golf,” said Ramón Dávila, president of Promotur, a tourism group in Andalusia. “And the government wants to re-balance this relation between the houses and golf.”

Full story at the International Herald Tribune

Now that there’s detailed Spanish house price information on Kyero.com, we’ve taken the opportunity to streamline the pdf version of the Kyero.com Spanish House Price Index.

As you can see from the image above, it’s just 3 pages in length now – but there’s no shortage of information in there. There are average prices for 30 Spanish provinces and pricing trends going back to the last quarter of 2006.

We’ve also worked hard on the layout and presentation to make it easier to read, understand and digest – I hope you like it and that it proves to be a useful overview and companion to the detailed information now available throughout Kyero.com. Either way, love it or hate it, please let me know.

Martin Dell, Kyero.com

Buyers of illegal homes in Catral, Valencia, have high hopes for the future thanks to the AECU.

As homeowners on the Costa Blanca face bills for infrastructure, a consumer’s association has stepped in to save the day.

Torrevieja-based consumers’ association AECU has launched a bid to force the builders of 1,300 illegal homes in Catral to foot the bulk of the bill to install crucial infrastructure such as the installation of sewage systems and street lighting.

The AECU’s president Honorio Fernández say innocent property buyers should not be ones to pay up, stating that the people responsible for constructing the illegal homes should meet the costs.

“Our way defends the buyers who are the victims in this, and not the builders,” he says.

“We will be asking the mayor to fine the builders and in this way reduce the amount that the home owners have to pay.”

In 2006 regional councillor Esteban González Pons estimated that promoters had made €80 million in profits from the illegal building in Catral.

To date no builder has been charged with any criminal offence over the construction scandal, but as Sr Fernández continues to speak on behalf of the unfortunate British buyers, this could be set to change.

Full story from homesworldwide.co.uk

Last year, a Property Pulse subscriber sold an old town house in the Valencia region. Some time later, she was contacted by the estate agent, saying that the new owner had recently discovered that the beams in one of the bedrooms were rotten. He had spent money on repairs, and wanted her to share the costs, citing the law of vicios ocultos.

When the previous owner of the property contacted me , I asked experts, Mark Wilkins of The Rights Group and Campbell Ferguson of Survey Spain for their comments and advice. Here's what "vicios ocultos" means to you if you're buying or selling property in Spain.

The liability lasts up to 6 months after the sale. It appears that the seller of a property is liable even if the defects cannot be seen and they are unaware of them. However, if the buyer can be shown to have any property expertise (or perhaps if they employ a surveyor to inspect the property for them) then the buyer becomes responsible and the seller has no more liability. It appears much more relevant to buying a TV, heater, loaf of bread from a shop, but the act does not exclude property.

The seller is obliged to remedy, or compensate for, any hidden defect or flaw that the sold article could have if that defect makes it unsuitable for the use to which it is intended, if it diminishes that use, and that having the buyer known of their existence would not have bought it or would have offered a lesser price for it. If the buyer is an expert or a qualified person due to their job, occupation or profession, the seller would not be deemed as responsible for those defects or flaws either if they are evident or visible, or if they can not be seen, being that that person should have been able to recognize them easily.

The buyer could opt to annul the contract, being the seller obliged to pay the buyer all the expenses that they have incurred or to reduce an amount proportional to the price that should be ascertained by experts. Moreover if the seller knew about the hidden defects and did not warn the buyer regarding them, the buyer may claim for a compensation for the damages and harms if the buyer opts for the contract annulment.

If the article which had a hidden defect is lost for any fortuitous cause or because of the buyer's fault, the buyer might claim the price they paid for the thing, deducting any reduction in value that the article might have had when it was lost, plus damages and harms if the seller acted in bad faith. These provisions expire six months following delivery of the article sold.

As a seller, specific wording can be incorporated within a sale document which effectively excludes this liability and means that the property is being sold 'as seen'. As a buyer, watch out for this clause in the contract as a possible indication that the seller might be aware of defects which you haven't noticed.

Even though a property survey is not always required by the mortgage company, it makes sense to use a qualified surveyor before making any commitment to purchase a property.

Martin Dell, Kyero.com

On 1st July, the EU Savings Tax Directive turned three years old. Also on 1st July, the withholding tax rate applied under the terms of the Directive jumped from 15% to 20% - an unwelcome reminder that keeping savings offshore is no longer effective tax planning.

At the launch of the Directive, the withholding tax rates were scheduled as follows:

1st July 2005 – 30th June 2008 – 15%

1st July 2008 – 30th June 2010 – 20%

1st July 2011 onwards – 35%

The increase from 15% to 20% means that anyone paying the withholding tax is now paying 33% more tax than a month ago. When it hits 35%, it will be a 133% increase from the launch rate. To make it even worse, most of those affected will remember the days when no tax at all was deducted from their offshore accounts.

It is important to point out what while no tax was deducted at source prior to 2005, anyone earning interest from an offshore bank account was still legally obliged to declare them on their Spain tax return - under local laws their worldwide income should be declared for tax purposes. The same rules apply in the UK for UK resident domiciles. So these interest earnings were never actually tax free… though that did not stop some people ‘forgetting’ to declare them.

This is precisely why the EU set up the Savings Tax Directive (STD). EU countries lose tens of billions of Euros each year to tax evasion. The STD was conceived a means of ensuring that an EU resident paid tax on their interest income, regardless of where the interest was generated and regardless of whether they actually declared it or not.

The STD is one part of a major tax package launched by the European Commission in 1997. Its original intention was for a uniform “information exchange” regime to apply across the EU, with all countries agreeing to report interest on savings paid to the citizens of other Member States to those States’ tax authorities – thus making it impossible for EU residents to hide their offshore savings income from their local taxman. The plan was also for EU Member States to impose the same rules on their dependent territories, which make up a substantial portion of the world’s tax havens.

A long battle followed, however, with various objections raised regarding automatic exchange of information which would effectively end banking secrecy within the EU.

Opposition came from within the EU itself and not just the dependent territories. In the end, a compromise was reached and under the terms of the STD, the withholding tax is applied by Andorra, Austria, Belgium, British Virgin Islands, Guernsey, Isle of Man, Jersey, Liechtenstein, Luxembourg, Monaco, Switzerland and Turks & Caicos Islands. All other EU Member States, plus Anguilla, Aruba, Gibraltar, Madeira, Montserrat, Netherland Antilles and San Marino apply automatic exchange of information, as will any future EU members. Bermuda and the Bahamas are currently not covered by the STD.

The withholding tax regime is only meant to be a “transitional arrangement”. The EU’s “ultimate aim” is for all participating jurisdictions to automatically exchange information on the interest earnings of EU residents in future. While there will obviously be strong resistance to this from some countries, the EU will fight every step of the way to eventually achieve this.

The European commission is also escalating efforts to persuade other jurisdictions to abide by the terms of the deal, including Hong Kong, Macao and Singapore. EU officials are negotiating with all three on a double-taxation agreement, giving the Europeans some leverage.

In the Isle of Man, Jersey and Guernsey, the withholding tax is referred to as “retention tax” (but it is exactly the same thing), and clients can authorise their banks to automatically exchange of information rather than pay withholding tax.

This gives you the option to pay tax in Spain instead of having tax deducted at source.

Since the start of 2007 interest income is taxed at a flat rate of 18% in Spain. This means that if your bank account has withholding tax deducted you are now effectively opting to pay extra tax (11% more). From July 2011 you’d pay 94% more tax!

It’s important to note that even if withholding tax is deducted, you are actually still obliged to declare the interest earnings in Spain since it forms part of worldwide income.

Anyone who has not previously declared this income in Spain should probably seek advice from a financial adviser before switching to the exchange of information system to benefit from the lower Spanish tax rate – your local tax authority may make enquiries as to why you had not previously declared this account – which would have been liable for wealth tax until this year as well as income tax on the interest income.

It’s often worth a chat with a financial adviser in any case, to establish if you can legitimately reduce your tax rate further. While 18% is lower than 20%, you may be able to pay less than this using appropriate structures.

Full story from Blevins Franks

Is any property below €50,000 a cheap Spanish property? Are cheap Spanish properties only to be found at auction or as bank repossessions? How much below market value does a Spanish property need to be to be considered cheap?

Continue reading: What IS cheap Spanish property?