With the Eurozone crisis effecting Spain and UK-Expats and a growing trend of people returning to the UK. If you are deciding whether to sell-up or if you are a potential purchaser, considering whether to buy, there may be a number of options to weigh-up before doing so. The following points will be of assistance:-
Considering coming back to the UK?
1) Have you got a job to go to and is there any probationary period – important if you may need to arrange a mortgage when you get back to the UK?
2) Is your current profession in demand in the UK or will you have to start again in a new occupation, alternatively would it be better for you to stay in Spain and continue in your current profession, especially if the cost of relocating outweighs the benefits of remaining?
3) Are you going to rent or buy when you move back to the UK? – the cost of renting is high in some areas (and there may be a lack of suitable properties) and therefore it may be better to purchase, whilst in other areas the price of property has increased, so that renting may be the ideal alternative.
4) If you stay in Spain and are receiving a fixed income in Sterling from the UK, then the amount you receive will have recently increased due to the strengthening of the £ to the € – ie: From approx € 1.10 to the £ and is now approx € 1.23 to the £ – as at 06/06/12.
Considering selling your Spanish property?
1) It is a difficult time to sell a property in Spain, due to the number of properties currently on the market and the decrease in demand.
2) However, the good news is that there are still some buyers who are considering purchasing in Spain for the following three main reasons:- Holiday/Lifestyle; Future Retirement; Investment
3) Also some regions of Spain will continue to be more popular than others, due to the continual interest as a holiday destination: – ie: Costa del Sol, Costa Blanca, Balearics and the Canary Islands.
4) When deciding a selling price, you must consider how much potential loss you may have suffered and how much of this is from any past growth that you have gained before the current crisis started.
5) Do you have to repay any existing mortgage, which will further reduce any potential profit or further increase the loss?
6) If you are transferring the Euros from a Spanish property sale to the UK back into £, then the loss you may incur may not be as great as you originally thought, depending on when you originally bought the property and the exchange rate received from the £ to the €.
A property originally purchased in 2007 for € 200,000 and when the £ to € rate was 1.42, this would have cost you £140,845.
Selling now in 2012 for €150,000 at a rate of 1.23, you would transfer £ 121,951 back to the UK
Loss in Euros = € 50,000
Loss in Sterling = £ 18,894
A further saving could possibly be made if you used as Currency Exchange Provider such as http://www.moneycorp.com/uk/personal/?rp=10157886
7) Check what others are selling their property for and how your property compares in size, type, number of bedrooms, local area and on-site amenities.
8) Do you need to sell now (ie: to cover costs for where you are moving to) or if not consider holding until the market improves and investigate the local holiday/long term letting market for potential tenants.
I would like to hear from you regarding any personal experiences or concerns applicable to your own circumstances, when moving between the UK and Spain. Please feel free to comment below.