Property Market Report
Innovation, determination and the enduring lure of the sunshine is keeping hopes of Spanish property ownership very much alive. British people with their hearts set on buying a Spanish home shouldn’t let Coronavirus or Brexit shatter their dreams.
Market conditions, technology and versatile property professionals continue to make buying property in the Costas attractive in 2021. This is the view of CEO and Partner at Sun Lawyers, Jose Maria Lomax.
Expectation is for a strong second half of the year
Demand and prices across Spain dropped slightly for the best part of 2020, before stabilising towards the end of the year when the second lockdown ended. Current sentiment indicates a downward curve again, while we endure the third lockdown. Expectations are that the market will bounce back in the second half of 2021. All this means prices are negotiable right now, especially in areas where some owners are keen to sell.
Favouring British buyers too is the buoyant pound, boosting buying power in Spain. Despite doom-mongers predicting that the UK’s currency would suffer when Brexit finally kicked in fully on 1 January 2021, its value has held up and is now back to levels not seen since last May. Getting a Brexit deal done and the impressive start the UK appears to have made with its vaccination roll-out could inject further strength into the pound. A cautionary note, however. With currency, the future is never certain. We recommend using a currency specialist to help you plan and get the most value when you transfer money to Spain.
Historically low interest rates
In tune with the economic landscape, borrowing remains cheap in Spain. This is thanks to the European Central Bank’s Euribor, to which most Eurozone banks peg their lending rates, being in negative territory (-0.5 per cent) with no signs of this changing anytime soon. This means Spanish mortgages are very affordable, including for non-resident/holiday home owners. Lenders typically require just a 30 per cent deposit with rates below 1.5 per cent available for variable deals (e.g. Euribor plus 1.35 per cent) or from 2 per cent for fixed deals. Even with the funds ready, lockdown means currently there is no way of getting out to Spain to view property and start establishing relationships with the necessary professionals.
But thanks to modern day telecommunications, today’s buyers are using FaceTime, Skype and Zoom, essentially doing much of the groundwork for their purchase from the UK. Not forgetting virtual viewings, which allows clued up estate agents to visit a property and stream live directly to their client sat on their sofa in the UK! Backed by the services of an independent solicitor, like Sun Lawyers, there is no reason not to consider securing a property after ‘visiting’ it virtually.
As an example, we have clients from Liverpool who in July made the decision to buy a duplex in Playa Flamenca based on a virtual viewing. We helped them to complete in October and they visited the property for the first time a couple of weeks after that. This type of sale is happening all along the Costas. It’s about being versatile and combining modern technology with the usual legal protection all buyers must have.
Free Spanish Power of Attorney during February
Like many clients, this Liverpool couple had granted us Power Of Attorney (POA) – a vital tool for completing a property purchase without having to be in Spain. Granting your lawyer POA gives them authority to act on your behalf throughout the transaction, and includes procedures like getting your tax number (NIE), opening a bank account and completing for you at the notary’s office.
Throughout February Sun Lawyers is offering a free Spanish Power of Attorney to new clients.
Meanwhile, for British people hoping to move to Spain in 2021 but concerned about their residency options, the door is still open. Existing visa options include the non-lucrative visa for early retirees or people not intending to work, or the Golden Visa for those with a budget for a property of €500,000 or more.
In time who is to say that Spain won’t introduce a visa for British people wishing to come and work here or a scheme that allows British people to come and go relatively freely, such as exists for Swiss and Norwegians, who also are not EU citizens. I hope we have provided a realistic yet optimistic assessment of the situation out here in Spain. As always we are at your service. If you are considering a purchase this year, I’d recommend you contact us for an initial no obligation consultation meeting.