An article from Kyero.com, looks at Britain’s love affair with Spain and some of the best places to invest your hard earned cash…

Spain, the UK’s favourite holiday location for years, has literally become a home away from home for the Brits. Since the mid 1990’s, Spain has been the number one choice with UK holidaymakers and its popularity keeps growing. In 2005, Spain saw a staggering 13,864,000 UK tourists.

Investing in Spain
They’re not just coming for holidays anymore. Every year, more UK families and young couples are choosing to leave the endless grey skies and set up home in sunny Spain. Spain is also still a key player in the buy-to-let and investment property markets, despite rising competition from emerging markets in Eastern Europe – the likes of Bulgaria, Romania and Croatia.

Being a mature market does have its advantages. Spain offers low interest rates and sustained long-term growth – something which these new emerging markets can’t guarantee. Spain also has an infinitely better climate than Eastern Europe, the Canary Islands in particular, which is a big factor when it comes to year round rental yields.

It’s debatable also, whether these emerging markets will eventually establish the same UK expat communities that exist more established markets like Spain and France.

Where in Spain?
According to the Kyero, Malaga, Granada and Alicante are the most popular regions in terms of Internet searches but Almeria and Valencia is where to look if you want a property at a price well below the national average with strong capital appreciation and rental potential. The Canary Islands, with year round sunshine, are probably the best buy-to-let location in the country.

Almeria
Located in southeastern Spain, this beautiful province, famous for its desert-like landscape, endless blue skies and intense light has been the setting for many spaghetti westerns. It’s also one of the best scuba-diving locations in Spain and just a short drive from the Sierra Nevada ski resorts.

It’s a land of contrasts with unspoilt coastal fishing villages and picturesque towns like Mojacar – one of eastern Spain’s best-kept secrets.

In recent years however, the region has become more popular. There are now numerous new hotel resorts and golf developments. Almeria’s airport is now served directly by a number of budget carriers, including Easyjet, Ryanair, Monarch and Flybe.



Although, development is increasing all the time, Almeria is still relatively untouched compared to neighbouring Malaga province. Property is cheaper now but will no doubt go up as development continues.

Valencia
Valencia on the eastern coast, directly across from Madrid also offers excellent value compared to the more popular tourist traps. Between 2005 and 2006, the region saw a steady rise in property values.

In Castellon (Northern Valencia) there was an increase of “35% from €167,000 in May 2005 to €225,000“.

The Costa Azahar is another area well worth looking at. This idyllic stretch of coastline boasts over 112 kilometres of unspoilt Mediterranean shores and a dazzling 320 days of sunshine a year. Properties here were 8% cheaper than the national average in 2006.

The capital (Valencia), Spain’s third largest city is vibrant, cosmopolitan and offers everything you’d expect from a major urban centre.

The 1992 Olympic games held in nearby Barcelona had a very positive impact on the city’s property market. The 2007 America’s Cup held in Valencia is likely to do the same.

Millions of euros have already been pumped into the infrastructure. There’s now a new high-speed rail link from Madrid and Valencia’s main airport has been extended. There are regular low cost flights from the UK.

Buy-to-let Hotspots – Gran Canaria
Gran Canaria, one of the last European paradise isles offers one of the most spectacular natural landscapes in Spain.

It’s a miniature continent with lush green forests, exotic wildlife and flowers, massive sand dunes, spectacular beaches, formidable snow-capped mountain peaks and huge volcanic craters.

The Canary Islands are the only genuine winter sun destination in Spain. Temperatures rarely drop below 18C or rise above 25C and it’s nearly always sunny. It’s perpetual springtime of these fortunate isles.

In Spain, a two-bedroom property can be rented out for approximately 100 euros per night during the peak seasons of July and August. On Gran Canaria, because of the climate, it’s peak season from January to January – all year long. Buy-to-let investors can make substantial earnings. Click the following link for more information on Gran Canaria Real Estate.

Research conducted by Spain’s National Statistics Institute has revealed the country’s hottest, sunniest and wettest locations for last year (2006)…

The Canary Islands
Located off the north west coast off Africa, close to the Sahara Desert, it’s no surprise that the Canaries have the best climate in Europe.

Unlike mainland Spain, the Canaries have a genuine year-round warm season. Southern Andalucia is of course much warmer and sunnier than Britain but can get genuinely cold during the winter months. The south of Spain is however, a very pleasant location if you want to escape the November drizzle and darkness.

The Canaries appear to have the lowest rainfall in Spain, which is good news for holidaymakers but perhaps not too good for the local farmers.

Fuerteventura was the driest in 2006 with just 63.1mm of rain falling at the airport. Next came Lanzarote and Santa Cruz de Tenerife, where they received around twice the amount of rainfall as Fuerteventura.

Tenerife
According to the figures Tenerife, the largest Canary Island, came out tops. In 2006 it had an average temperature in of 21.8 degrees centigrade – the highest in the island group. It also had the most sunshine – a staggering 3,565 hours in the year, the same as ten hours every day.

Other Hotspots
Lanzarote followed closely behind Tenerife in terms of temperature. Rota, in Cadiz province in the south west of Spain was the sunniest location on the mainland. Last year the local “gaditanos” received a blazing 3,010 hours of sunshine.

Cold and Wet Spain
If you get tired of all that sunshine and want some genuine cold and damp, head inland. Spain is the most mountainous country in Europe and because of the altitudes can get very cold.

The coldest place in Spain last year was Puerto de Navacerrada ski station, located in the Sierra de Guadarrama Mountains, north of Madrid. The average temperature was a chilling 7.9 degrees for the whole year. Izaña de Tenerife at 2300m in altitude was nearly as cold.

The wettest part of Spain last year was the Labacoa near Santiago de Compostela, in Galicia, northern Spain. The town was drenched with well over two metres of rain.
Many other towns in this lush green region suffered a similar fate.

The darkest regions were all along the Costa Verde (Green Coast) in the north of the country. Asturias, Bilbao and Cantabria received less than half the sunshine of Santa Cruz de Tenerife.

Investing in Tenerife
Tenerife has excellent potential both as a place to live and a place to invest. It has a very high quality of life along with great rental potential.

One of the best ways to research properties and locations on the island is to use the Internet. Any Tenerife Property Search will give you access to property listings, local area information, investment advice, buying guides, mortgage advice and numerous property related articles.

If you’re eager to escape the dark and dismal UK climate for good, Tenerife is clearly the place to buy.

Property for sale in Tenerife
Here’s a few example of what you’ll find online…

Costa del Silencio, Tenerife
2 bed Apartments
An apartment on an older complex, well maintained and ideal for holiday rentals. The property comprises, 2 bedrooms with fitted wardrobes…
Sale Price: €94.500

Guargacho, Tenerife
2 bed Apartments
4 two bed apartments; various floor levels; with community roof terrace and utility room…
Sale Price: €111.000

El Fraile, Tenerife
2 bed Apartments
Two bed apartment; new furniture and doors (in oak); everything new inc. kitchen…

According to Kyero.com (Spain’s leading property portal) the coming years will see less and less golf developments being constructed as pressure from environmental groups increases. So, for anyone looking for that luxury villa set amidst endless lush green fairways, the advice is to buy as soon as possible before there’s no properties left.

As pressure increases and the authorities eventually give in to the various environmental groups, we’ll see less and less golf properties and developments throughout Spain and the Canary Islands.

With an increasing demand for golf properties and falling numbers of available properties, they’re set to become even more exclusive – investors who buy now should expect to make significant returns through rental yields and/or property appreciation.

Effects on the environment
“Developing a golf course entails the clearing of vegetation, cutting forests and creating artificial landscapes, which lead to land erosion and block the soil’s ability to retain water” – Click here for the full article.

Golf courses use up an amazing amount of water and the bigger the course the more they consume. According to The World Wide Fund For Nature (http://www.wwf.org.uk/) “each average golf course uses up as much water as a medium sized town with about 12,000 inhabitants”.

Southern Spain (Andalucia) is one of Spain’s most popular golfing destinations, yet every year for the past four years the region has been plagued by droughts. This is where Spain’s water crisis is at it’s worst.

But it’s not the only area. Some parts of Spain simply don’t have enough water. On Lanzarote, where the landscape is very dry and largely volcanic, de-salination plants have had to be introduced.

Development issues
Many people believe that the need for more golf courses is simply an excuse by greedy developers to build more and more properties.

Overdevelopment has been one of the main causes of Spain’s recent property crisis. Hungry developers simply built too many properties and now they’re seeing many of them go unsold. Property values have dropped. With this decrease, some unfortunate investors have gone into negative equity.

With mass development all over Spain’s popular costal resorts, buying into a golf development is perhaps the only way you can still get guaranteed views of lush green landscapes as opposed to more apartment blocks, a motorway, nightclubs, or even a high-rise building.

Investing in Golf Properties
Although owning your own luxury golf villa, set amidst lush green fairways, under endless blues skies is indeed appealing, it would be careless or short-sighted, not to realise the negative impact these courses do have on the environment.

That said, golf courses provides countless hours of enjoyment for both young and old, all throughout the country and contribute significantly to Spain’s tourism industry.

Any advice for environmentally friendly investors would simply be to choose an already built golf development – thereby limiting further damage.

Golf Hot Spots (Fuerteventura)
Devoid of anything green, this surreal desert landscape has taken off as one of the Canary Island’s most unlikely, yet popular golf locations. Check out the following link for available properties from Montana Roja – Fuerteventura Property for Sale.

Mark Stucklin (Sunday Times Home Section, 16 September 2007), points out – “Recent reports suggest that most holiday rentals in Spain are illegal without a licence, and can incur fines of €30,000 for unsuspecting owners.”

Frightening news for many Britons – especially those hoping to pay off the mortgage through renting. But is it all bad news? The whole issue seems to be surrounded by
speculation, confusion, half-truths and oftentimes just plain wrong information. It’s Spain remember – things are never as they seem…

The truth is that, for the moment, most property owners are completely unaffected by the licence situation. You’ll only really need a licence in certain parts of the country and in those areas the law is rarely enforced properly.

The laws in Spain
Spain is notorious for its laid-back “manana, manana” lifestyle. In some cases, the same attitude extends to legal procedures. Also, with so many “illegal” properties being rented out all the country, it’s almost impossible to effectively enforce these license laws.

Online there are literally thousands of properties advertised for rent in both Spain and on the Canary and Balearic Islands. A significant proportion of these are owned by British property owners who have no idea about licence laws and therefore, whether or not they are breaking these laws.

Even if people are aware of the rules and regulations concerning tourist rental licences, most of them have difficulty interpreting them, as they are so unclear.

It’s certainly confusing – as with a lot of things in Spain. The rules concerning tourist rental licences vary widely throughout the country.

In Murcia you have to register with the department of tourism if you want to rent out your property to tourists, whereas in most other parts of Spain all you have to do is tell the local government about your plans to rent it out.

Ultimately, the Spanish government probably just wants to keep tabs on who’s receiving money from holiday rentals so they can make sure the correct taxes are received.

Which parts of Spain actually need a license?
“I can categorically state that you don’t need a licence to rent out a private apartment or villa to holidaymakers on mainland Spain”, according to Lee Jones, head of OPI Property Management and Lettings.

Apparently they’ve had their specialist lawyers confirm this, pointing out that, “with 3,500 holiday rentals this season, we can’t afford to make a mistake.”

It’s a different story on the Balearic Islands though, Mallorca in particular. Here you’re not allowed rent out private residential apartments. “The only kind of residential property you can rent out is a detached villa, but only if you have a licence”, according to Isabel Loeffler, (head of Loeffler Legal Centre, on Mallorca).

It gets worse…

The tourist department on Palma are now saying that it’s not even possible to get a licence to rent out a detached property anymore.

Buy-to-let investors could always choose an “apartamento turistico”, which is a purpose built property, intended solely for renting out.

For homebuyers wanting to make a few quid renting out while they’re not there, they’re not really suitable. Apartamento Turisticos carry a lot of restrictions and potential extra costs.

So what can you do?
It still seems unclear. To be on the safe side, speak to a local Spanish lawyer who should know the specific licence situation in whatever part of Spain you’re considering investing in.

Background (Buying Property)
Just like anywhere else in Europe, buying or selling a property in Spain can be a messy process and there’ll often be issues that can keep you awake at night.
In Spain you run a similar set of risks when buying or selling as you do back in the UK. Therefore, a lawyer is required by both sides to protect both their interests.

Resale Purchases
If you’re buying a second hand (resale) property not only will you have to check that the owner of the property is who he says he is but also that the property corresponds to the details in the title deeds.

In Spain, debts stay with the property, not the owner. You need to make sure there in no outstanding payments due on the property before you buy.
This is just the beginning. There are countless other checks that need to be performed before you can sign any contract. Other issues include everything from building permits and water rights to community fees etc…

Buying Off-Plan
“Unless the contract you sign nails down the developer to delivering a clearly specified property, with all the necessary licences and guarantees, and more or less in the time frame agreed, you run all sorts of risks.”
For off plan purchases a lawyer is also essential, especially if you don’t want any unpleasant surprises – right after you’ve signed half your life away.
With new developments all you’ll have is a signed contract promising certain things – nothing concrete (literally). What’s written down in the contract is your only security. A Spanish lawyer, working for your interests, can make sure that the contract suits you and at the same time is reasonable and realistic.

Using a Lawyer
Whether it’s a resale or an off-plan investment, it’s best to use lawyer in Spain. Some real estate agents will tell that you don’t need a Spanish lawyer because the Notary will give you all the legal protection you need. This is often said to protect their own best interests – not yours.

An Independent Lawyer
“63% of British buyers end up using the lawyer recommended to them by their estate agent. Of these 20% report being very dissatisfied with the legal service they receive, compared to just 2% who use a lawyer that they have found themselves.”

Not many UK buyers know where to find a Spanish lawyer and often assume that it would be safer to just use one recommended by the agent or developer. It’s certainly easier – in the short run.

The problem is that most estate agents are highly motivated to close sales – often sales that pay huge commissions. They’ll recommend any lawyer who’ll facilitate this outcome, especially their in-house lawyer.

Buying a property is a huge investment. With something this valuable, you’ll need a lawyer who you can be certain is working for you and you alone. You can never be too sure about what kind of relationship the lawyer and real estate have – so it’s best to find your own.

It’s also a very good idea to find a Spanish lawyer before the purchase process begins because once it starts, if disputes arise, it might be too late.

Find a lawyer before you contact the agent or developer, so you won’t be pressurised into using theirs.

Finding an Independent Spanish Lawyer
Independent English-speaking Spanish lawyers are quite easy to come by in both Spain and the Canary Islands. The obvious approach is to just ask friends or acquaintances for a recommendation. You can also try the nearest British Consulate who can easily supply you with a list of English-speaking lawyers your region. Click here for a list of all the British consulates in Spain.