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Spanish market picking up

The property market in Spain is more buoyant than it has been in a long time and mortgage rates are at their best since the recession hit, says overseas property expert Simon Conn.

Spain is still Europe’s favourite holiday destination and many Brits decide to take the plunge and either emigrate or buy a holiday home there. It offers a great lifestyle and is ideally placed as it is only a short distance from Britain and offers a fabulous climate that we do not often have in this country.

Spain is celebrated for its fantastic food and wine and the fabulous way of life obviously pays off as it has the fourth highest life expectancy in the world.

The country is steeped in history and culture and you can walk in the footsteps of George Orwell and Ernest Hemingway, visit artist Gaudi’s famous buildings or the iconic Bilbao Guggenheim Museum.

There are plenty of activities for all ages, including watersports, walking, cycling and an abundance of excellent golf courses.

Although Spain is generally perceived to be a hot and dry land, Northern Spain tends to be rainier than other parts of the country and is therefore greener and lusher.

There are many properties on the market and popular areas for prospective purchasers include Madrid and Barcelona. Madrid is Spain’s capital and the third largest city in the EU. It has plenty to offer – it is a major hub for politics, has an excellent education system and the entertainment and arts scene is buzzing. It has even been named one of the top 10 places to live in the world. Barcelona is another city frequently chosen by ex-pats seeking a new life.

The Costa Del Sol, which means coast of the sun, is rich with towns and cities and is a magnet for tourists and English ex-pats alike. The weather is a major pull and the region has an interesting history.

Spain is also a popular country for letting out properties, although currently there are no buy-to-let mortgages available. If you do buy-to-let you will need to have a license, so check with the local authority, and be careful if you are buying a repossession – more advice can be found on my ‘points to consider when purchasing a repossessed property’ blog on my website.

I would recommend taking advice regarding who should actually own the property before you purchase it as it is such an important decision and can have a significant effect on taxes and inheritance. Taking advice before you buy can potentially save thousands of pounds in the future as after you complete, many of your opportunities are gone.

Also, it is important to think about what will happen to the property when you die and by making a Spanish Will you can ensure your wishes are carried out.

When you’ve found your ideal home, a reservation agreement is normally made and the property will be removed from the market for 7-10 days. A fee is normally paid but this is refunded as long as the contract is signed within the reservation period.

Never sign a contract without your independent lawyer taking a look first, although it is essential that he or she understands both Spanish and UK laws because of the tax and inheritance issues. He or she will investigate planning permission and confirm that all is in order – all too often we hear about properties which have been bulldozed and there is nothing the devastated owner can do about it.

When the contract has been signed, a public official called a Notario will oversee the signing of the title deeds, although your lawyer will still be involved, and the lender will take care of the conveyance paperwork.

Once the purchase is finalised, there are still things you should be aware of. There are annual taxes and often community fees which will have to be accounted for.

The maximum loan to value now stands at 70 per cent and interest rates can be as low as 2.5 per cent. Of course, this all depends on the size of the mortgage, loan to value, purchase price and a client’s personal financial status.

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Details correct when this article was originally posted on December 19, 2014.