Have Villa Sales in Spain Been Affected by the Credit Crunch?

It’s no secret that many industries all over the world have been affected by the credit crunch. But with Spanish properties it can depend on the location, and there are steps you can take to avoid being hit.

Villa sales in Spain have slowed in some parts, factors including the exchange rate and buyers not being able to afford second mortgages are a noticeable influence, but it need not be a problem. There are many sellers that are willing to negotiate and accept offers below the original asking price, and this means that you could get a villa that really is value for money. Although the credit crunch has had a substantial impact in the UK, people are still willing to spend money abroad whilst budgeting back home. So if you are buying a villa to rent, Spain is still potentially a profitable investment if you are looking to buy abroad in general. If you are planning to relocate, it could prove an ideal time to invest in a Spanish villa especially as property prices are falling. There are also several steps you can take to make sure you beat any credit crunch problems that might arise.

Villa sales in Spain are still the most popular in Europe. Spanish house prices have risen steady over the past ten years, meaning that owners that already have Spanish property will have seen a rise in the value of their home and do not feel the full impact of the current financial climate. The key to seeing through these unstable times is organisation, support and budgeting.

Firstly, work out your budget and stick to it. Look for locations that offer the best value for money. Initial research can be done easily on the Internet. Write down the essentials in what you are looking for and find out the average prices in different areas. For example, you might get a better price for a two-bedroom villa with a swimming pool and sea views in the Costa del Sol than further up the coast, or maybe you don’t need a pool if you are near the sea. So research your options and get as much information as possible.

If you find a property that you like, one of the first things to check is whether the villa has been constructed legally and that it hasn’t been built on land classified as rural. Many foreign buyers have been caught out on this particular sticking point and the authorities may want take back the land. A good way to protect yourself from such problems is to hire a good, trained lawyer from a trusted and recommended source. You need to make sure that they have your best interests as their priority, and an excellent knowledge of the region including information about rules and regulations, taxes and planning permission. Adding at least 10% to your budget is always a good insurance to cushion you against surprise fees. The lawyer will also help you go through all of the legal formalities, which may differ from area to area. You need to make sure you can pay on time too. Don’t rely on another sale to fund your purchase. Find a good mortgage to start with so that you know you have the money when you need it, as there are often time limits on purchases.

Make sure you know what the structure for ownership is, especially if you are buying with another person or as a group. You need to be insured if someone pulls out or is unable to keep up their part of the bargain. Above all else, take time in planning your purchase, from finding the right location to making sure you can sustain your funding of the property. Visit the property as many times as you can and get to know the local area, making sure that it has easy access to airports and healthcare facilities, as well as all the nightlife and culture you need.