24 November, 2014

By VIVA Team

Spanish property sales have risen by more than 50% in the past three years

Bereft of sunshine but rich in sterling, British homebuyers have this year returned in their droves to their spiritual second-home-home of Spain, according to a recent report by foreign exchange company Currencies Direct.

Sales of Spanish property have climbed 56 per cent this year compared to 2011, and have increased by 25 per cent since last year. Much of this growth has been fuelled by British buyers boosted by the strong pound, lower Spanish prices and a more stable, transparent market…The soaring cost of UK property was also cited as a driving ‘push’ factor, said Currencies Direct Trading Floor Manager, Phil McHugh. Other driving factors include the recovering UK economy – with Brits better off in 2014 than they have been for nearly eight years – and low interest rates, which make property investment currently more attractive than pouring money into savings.

Among the British buyers in Spain, those of retirement age have seen their numbers increase as more and more pensioners have opted to release equity in the UK to free up funds for a Spanish property purchase.

“The strength of the pound against the euro, which means buyers are seeing their money go further, is boosting appetite for big-ticket investments like overseas property,” said McHugh.

According to figures from Currencies Direct, the average Spanish property is priced around nine per cent below 2011 levels, and is around 5-6 per cent below last year’s prices. Experts within the industry do not expect prices to fall any further, and in popular areas such as the Costa del Sol, Spanish home values have actually begun to rise once more.

John Collier-Wright of JR Capital revealed that luxury locations such as Marbella are proving attractive, long-term options for investors hoping to put their money in a safe, profitable place.

“American, British and other overseas investors have begun to move back into Spanish real estate, both commercial and residential, as they can now seen fundamentals in place concerning limited supply of desired, prime property,” said Collier-Wright.

The current strength of the pound against the euro is unlikely to last, experts warned, suggesting that the strong end to the year the Spanish property market is currently enjoying may not prove quite as sustainable beyond the first quarter of 2015.