- This topic has 12 replies, 8 voices, and was last updated 11 years, 3 months ago by
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Hello,
Our plan was to sell up in the U.K. and clear our Spanish Mortgage. Stay in Spain for a few years, then sell up and return to the U.K. and buy a small apartment. We have now put our UK property on the market but on reflection do not think that the way Spain is going, we may not get enough for our Spanish apartment to relocate. While we are out there UK prices will be rising.
I am reading 10-15 years for recovery in Spain.We are in our mid 60s and wanted to come back to the UK by 70.
Maybe not the right place to put all our UK equity.We are now seriously thinking of selling our Spanish apartment which will be at a big loss, and also having to make up the outstanding amount to the bank which really hurts! We are still working and will have to continue until we find a buyer in Spain.
We were one of the off plan buyers back in 2003 led all the way by a well known Estate Agent whose past has caught up with him.
By the time our property was finished (2005) the values were not being realised as predicted and we then learnt in 2006 the apartments had been illegally built. Even though we are now on the new PGOU (2010)we are all still waiting for our LFOs. This has had a devastating effect on the prices on our development. Just seems a no win situation with time running out.
Please do not come back and say we should have known better we have lived with that fact for 10 years.!!
Thank you. -
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Holly,
It sounds like it might be a better idea to keep your UK property, but the devil is always in the detail.
Bear in mind that every time you buy and sell, transactions costs eat into your capital, so don’t want to avoid that unless you are being compensated by high capital gains, which is unlikely.
Also, as you are sadly discovering, the Spanish property market can be very illiquid. It can be difficult to sell when you need to.
Mark
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I would say stay put in the UK. Are you working in the UK then? Try to keep paying the Spanish mortgage and hope that in a few years you can sell the place. If you want some time in the sun why not rent your UK place rather than sell. A place in the UK is far safer.
Do you own a house now in the UK? could you sell that and buy a smaller place in the UK and use the extra funds to help get rid of the Spanish property at a lower sale price now?
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If your mortgage on your spanish property is held by a spanish bank, you might consider declaring bankruptcy in Spain. Your property there will be worth at best half of what you paid,so by paying off your mortgage there you will simply be digging yourself deeper into a financial quagmire. A visit to a solicitor who specializes in bankruptcy in Spain,or at least a financial advisor would be my suggestion.
The last thing banks want is to repossess spanish property and once they know that you are seriously considering walking away from your investment, they might offer you terms that are more reflective of market conditions.
You are right in your assessment that property values in the UK will rise far more quickly than those in Spain, so once you sell you will not be able to afford to purchase a similar sized home in ten years time.
I would consider renting your UK house and using the revenue to help defray your costs in Spain.Best of luck,
Mexberry.
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I know somebody in big negative equity in Spain -but my understanding is that bankruptcy in Spain is not as simple as in UK. In Uk you can file bankrupt and in short time if you have no other assets and no fraud you get a clean slate. But in Spain I hear creditors can even charge you out of your state pension.-Is that true ? And under EU law can chase you in another member country if they think you have assets there.
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I’m afraid there are no simple answers to this extremely common problem for expat (British) Spanish property owners.
If negotiations with your Spanish lender fail, can you still afford to keep up the payments? If the answer is No, then you have no choice in the matter, but you will still have an increasing Spanish debt, Spanish bankruptcy is not really an option, it doesn’t work the British way.
Your obvious worry will be the safety of your British property and British earnings and whether your Spanish lender can pursue you in the UK. That will depend on your own personal circumstances, but you will be protected by British law which at this stage doesn’t seem very supportive of the aggressive way Spanish institutions operate.
Not that it’s any consolation, but I would imagine your agent being A and the developer TM, who between them have wreaked havoc upon thousands of expats with their machinations over many years. I’ve noticed that the A viewing coaches are on the road again.
I believe there are court actions by expats against both companies, including some in the UK, but I don’t have the details.
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Holly, can you remember when you bought in 2003 what the exchange rate from Stg/Euros was which should now work in your favour changing back from Euros to Sterling, I would think this will mitigate some of the loss if you could sell. In which case cutting your losses may be a good thing as other say UK property we’re told is on the rise again maybe for a couple of years or more.
Have pm’d you 😉
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