5 February 2006
Thousands of British homebuyers head to both countries – but where is the best place to buy property? Home’s own resident experts, our French Mistress, Helena Frith Powell, and Spanish Property Doctor, Mark Stucklin, slug it out
The welcome you get from the locals
The French call us perfidious Albion and les rosbifs; we call them craven and Frogs. In the French media, “anglo- saxonne” is their code for everything wrong with the modern world. Despite the entente cordiale of 1904, there is no love lost between us.
So it should come as no surprise that the French Resistance is back in action, this time saving rural France from British homebuyers. Tensions are mounting in Brittany and the Dordogne as Brits price locals out of the market while making no attempt to go native (“clinging on to Blighty” as the French Mistress describes it).
In Spain, on the other hand, the British get the red carpet. There are no spiteful nicknames, no historical animosities, no modern rivalries and certainly no resistance if the British want to throw money at local properties.
The Spanish are falling over themselves to learn English, while the French are still lamely trying to make the rest of the world speak French. If you must learn a new language, you are better off learning Spanish, spoken by 330m people, than a language spoken only in France and parts of Canada and West Africa.
Quality of life
The French may have more three-star Michelin restaurants and spend more public money on healthcare, but on all other fronts you can argue that Spain offers the better quality of life.
Crime: According to the seventh UN survey of crime trends, in 2000, France suffered the fifth-highest level of burglaries in the world, with 371,000, compared with 24,000 in Spain. In terms of total crimes, France was in fourth position, with 3,770,000; Spain, in 16th position, had 923,000.
Cost of living: Comparative figures from the Organisation for Economic Co-operation and Development (OECD) show that prices in France are 94% of the OECD average, while in Spain they are just 79% of the average.
Taxation: OECD figures for 2001 show France had the fifth-highest tax rate among selected OECD countries, with 48.3% of average gross earnings given up in tax. Spain was 15th, with 37.9%. The Spanish government is in the process of reducing taxes further.
Property choice and prices
Between 1997 and 2005, Spanish property was a better investment than French property, with gross returns 50% higher, according to The Economist’s global house-price indicators. Looking to the future, there is a risk that property is overvalued in both countries, perhaps slightly more so in Spain, although the difference does not appear to be large.
When it comes to buying property, most Brits want a reasonably priced villa on the coast somewhere warm and sunny. Spain’s Mediterranean coastline is twice as long, further south and covered in villas, which is precisely why more Brits choose to buy there. Spain may be less elitist than France, but it’s certainly more popular.
Most buyers want to escape the winter or enjoy the summer, or both. The summer bit is easy in both countries, but for a good winter climate you need to be south of the city of Valencia, on Spain’s Mediterranean coast.
Anywhere north of here, and the winter starts to bite, which rules out France as a winter sunshine destination. Spain has more than 620 miles of Mediterranean coastline below Valencia, not to mention the Canaries, Europe’s winter sunshine destination par excellence.
Presence of other Brits
The French national statistics website (www.insee.fr) gleefully offers figures on poverty and social exclusion in the UK, but has almost nothing to say about the number of foreign-born residents in France. It takes a lot of internet research to find out that there are some 100,000 British-born residents in France.
The Spanish national statistics website (www.ine.es), with nothing to say about social problems in the UK, readily reveals that there are 227,000 Brits officially resident in Spain.
So yes, you are more likely to come across other Brits in Spain, largely because Spain is a nicer place to live. Unlike in France, Brits are largely concentrated in some coastal areas and so are easier to avoid. Torrevieja may seem like a hot version of Blackpool, but central and northern Spain are almost Brit-free.
Travel and access
Low-cost airlines have wiped out France’s traditional advantage of proximity. They now fly to 30 airports in Spain, compared with 35 in France.
Spain’s airports can also be reached from departure points spread more widely around the UK. Compare, for instance, Perpignan airport in France with nearby Girona in Spain. You can fly to Girona from 12 UK airports but to Perpignan from only five.
What to do when you get there
With so many Brits now living in or visiting Spain, opportunities to find work or set up businesses there are increasing. Before you rush to set up a B&B, bear in mind that, like renting gîtes in France, this is a rather crowded sector.
On the leisure front, you are spoilt for choice in both countries, so this must be a non-differential factor, though the French Mistress may have other ideas about exotic leisure pursuits in France.
Bureaucracy and taxes on property
Okay, these are not Spain’s strong points. Anybody buying property in Spain needs an identity (NIE) number, and there are other bureaucratic hoops to jump through in the process of owning property and becoming a resident in Spain.
Non-resident property owners also have to deal with some low but nonetheless unwelcome property taxes. Along with local rates, say 400 (£275) per annum, there is an imputed income tax and a wealth tax that often come to about £340-£680 per annum combined. Then there is the scandalous 35% capital-gains tax that non-residents have to pay when they sell, compared with 15% for residents.
To buy property in a new country, you need a positive outlook. So how do France and Spain compare? The French are vainly trying to cocoon themselves against globalisation, clinging on to agricultural subsidies and blaming everybody else for their problems. French society is increasingly riven, with rioting and car-burning in the banlieues, while the National Front marches on. Public finances are in a mess, too, with a budget deficit stubbornly above the EU’s ceiling of 3%.
Spain also has its problems, principally of national identity in the political arena and declining competitiveness in the economic sphere. Nevertheless, the country’s recent economic growth has been good, and public finances are healthy. And crucially Spain is placing a hefty bet on northern Europeans relocating to Spain, building golf-course and retirement developments to house them. With that attitude, you’ve got to take your sombrero off to the Spanish.
Read Helena Frith Powell’s response: Vive la France
© Mark Stucklin (Spanish Property Insight)