Gloom for ex-pats in Spain.

[loganParticipant]

Soon there won’t be a single Brit left in Spain. These stories just keep on coming. 🙁
http://www.telegraph.co.uk/finance/personalfinance/8454000/British-expats-forced-to-sell-up-and-come-home.html

[angieSpectator]

A significant but rather overlooked topic but one that has dire consequences for the Spanish property market.

The euro/sterling rate worsening for Brits wishing to buy, and, those living in Spain and Eurozone countries with mortgages seeing an increase on their repayments. Repayments probably funded by exchanging sterling at awful rates.

A conundrum for many Brits 🙄

[angieSpectator]

A significant but rather overlooked topic but one that has dire consequences for the Spanish property market.

The euro/sterling rate worsening for Brits wishing to buy, and, those living in Spain and Eurozone countries with mortgages seeing an increase on their repayments. Repayments probably funded by exchanging sterling at awful rates.

A conundrum for many Brits 🙄

[AnonymousParticipant]

@logan wrote:

Soon there won’t be a single Brit left in Spain. These stories just keep on coming. 🙁
http://www.telegraph.co.uk/finance/personalfinance/8454000/British-expats-forced-to-sell-up-and-come-home.html

What a ridiculous thing to say

[AnonymousParticipant]

@logan wrote:

Soon there won’t be a single Brit left in Spain. These stories just keep on coming. 🙁
http://www.telegraph.co.uk/finance/personalfinance/8454000/British-expats-forced-to-sell-up-and-come-home.html

What a ridiculous thing to say

[loganParticipant]

Lighten up, it was an ironic tongue in cheek remark. 🙂

[loganParticipant]

Lighten up, it was an ironic tongue in cheek remark. 🙂

[ozmunkyParticipant]

@angie wrote:

A significant but rather overlooked topic but one that has dire consequences for the Spanish property market.

The euro/sterling rate worsening for Brits wishing to buy, and, those living in Spain and Eurozone countries with mortgages seeing an increase on their repayments. Repayments probably funded by exchanging sterling at awful rates.

A conundrum for many Brits 🙄

Hmmm.

I think the Euro/Sterling thing is only short term.

Once the PIIGS action starts really getting going, the exchange rate will be much better, with Sterling on top and god knows whats going to happen to the USD.

I think this is a dip in the cycle of life.

Those Brits that are returning now are those who didn’t have or had borderline resources (without proper income plans) to move to Spain in the first place.

The real action, of course, is what Spain will do over the coming decade to make it non-toxic to those who wish to move there.

— Munky

[ozmunkyParticipant]

@angie wrote:

A significant but rather overlooked topic but one that has dire consequences for the Spanish property market.

The euro/sterling rate worsening for Brits wishing to buy, and, those living in Spain and Eurozone countries with mortgages seeing an increase on their repayments. Repayments probably funded by exchanging sterling at awful rates.

A conundrum for many Brits 🙄

Hmmm.

I think the Euro/Sterling thing is only short term.

Once the PIIGS action starts really getting going, the exchange rate will be much better, with Sterling on top and god knows whats going to happen to the USD.

I think this is a dip in the cycle of life.

Those Brits that are returning now are those who didn’t have or had borderline resources (without proper income plans) to move to Spain in the first place.

The real action, of course, is what Spain will do over the coming decade to make it non-toxic to those who wish to move there.

— Munky

[AnonymousParticipant]

Ozmunky. I am 100% in your camp

[AnonymousParticipant]

Ozmunky. I am 100% in your camp

[loganParticipant]

@ozmunky wrote:

I think the Euro/Sterling thing is only short term.
— Munky

Sterling has been depressed for almost 3 years and has at least around another 15/18 months before it even begins a small recovery. Interest rates need to rise and the UK economy grow 2% before the currency starts to turn.
It is far from certain the British economy will recover in the medium term. The US economy is going backwards, commodity prices around the world are rising. The sovereign debt problem will continue to be a fiscal drag on the Eurozone.
The prospects for recovery are not good except for Germany who can sell their manufactured products easily to Asia and China where demand remains strong.
Britain has largely lost that capacity and relies on service industries, similar to Spain whose one club economy of construction has brought the country close to it’s knees.
Recovery for Sterling in the short term? Sadly I don’t think so.

[loganParticipant]

@ozmunky wrote:

I think the Euro/Sterling thing is only short term.
— Munky

Sterling has been depressed for almost 3 years and has at least around another 15/18 months before it even begins a small recovery. Interest rates need to rise and the UK economy grow 2% before the currency starts to turn.
It is far from certain the British economy will recover in the medium term. The US economy is going backwards, commodity prices around the world are rising. The sovereign debt problem will continue to be a fiscal drag on the Eurozone.
The prospects for recovery are not good except for Germany who can sell their manufactured products easily to Asia and China where demand remains strong.
Britain has largely lost that capacity and relies on service industries, similar to Spain whose one club economy of construction has brought the country close to it’s knees.
Recovery for Sterling in the short term? Sadly I don’t think so.

[AnonymousParticipant]

Me thinks. How long is Long & How short is !!!!!!!!!!!

[AnonymousParticipant]

Me thinks. How long is Long & How short is !!!!!!!!!!!

[loganParticipant]

@ozmunky wrote:

Those Brits that are returning now are those who didn’t have or had borderline resources (without proper income plans) to move to Spain in the first place.
— Munky

I think that comment is a little unfair Munky. How can you budget for a 30% devaluation of your currency? Who could have predicted the extent of the property crash and it’s long term consequences? Hindsight has always 20/20 vision.
The British ex-pat communities in France are suffering the same fate as Spain. Not because of a property crash but price inflation, higher taxes, expensive healthcare and poor exchange rates.
The fact is that living abroad is always going to be a riskier business than staying in your home country. I think the current generation of ex-pats have discovered that very painfully and through circumstances over which they had no control.

[loganParticipant]

@ozmunky wrote:

Those Brits that are returning now are those who didn’t have or had borderline resources (without proper income plans) to move to Spain in the first place.
— Munky

I think that comment is a little unfair Munky. How can you budget for a 30% devaluation of your currency? Who could have predicted the extent of the property crash and it’s long term consequences? Hindsight has always 20/20 vision.
The British ex-pat communities in France are suffering the same fate as Spain. Not because of a property crash but price inflation, higher taxes, expensive healthcare and poor exchange rates.
The fact is that living abroad is always going to be a riskier business than staying in your home country. I think the current generation of ex-pats have discovered that very painfully and through circumstances over which they had no control.

[loganParticipant]

@shakeel wrote:

Me thinks. How long is Long & How short is !!!!!!!!!!!

Short term is usually up to a year. Medium can be up to 2 to 10 years. Long term up to 20, it depends on the type of investment.

[loganParticipant]

@shakeel wrote:

Me thinks. How long is Long & How short is !!!!!!!!!!!

Short term is usually up to a year. Medium can be up to 2 to 10 years. Long term up to 20, it depends on the type of investment.

[ozmunkyParticipant]

@logan wrote:

@ozmunky wrote:

Those Brits that are returning now are those who didn’t have or had borderline resources (without proper income plans) to move to Spain in the first place.
— Munky

I think that comment is a little unfair Munky. How can you budget for a 30% devaluation of your currency? Who could have predicted the extent of the property crash and it’s long term consequences? Hindsight has always 20/20 vision.
The British ex-pat communities in France are suffering the same fate as Spain. Not because of a property crash but price inflation, higher taxes, expensive healthcare and poor exchange rates.
The fact is that living abroad is always going to be a riskier business than staying in your home country. I think the current generation of ex-pats have discovered that very painfully and through circumstances over which they had no control.

Yes you are probably right, it may have been a bit strong — the factors you have mentioned would have been at the high end of people’s stress testing on what could go wrong.

That said, I have seen over many years (as we all have) all those stories of expats coming to Spain to start a new life without much planning or resources and its mostly these stories I am referring to.

Then, there is the appallingly disgraceful situation of the Prior’s which no one could plan for, foresee or have to endure — which is a totally different story — a story Spain should hang its head in shame for.

[ozmunkyParticipant]

@logan wrote:

@ozmunky wrote:

Those Brits that are returning now are those who didn’t have or had borderline resources (without proper income plans) to move to Spain in the first place.
— Munky

I think that comment is a little unfair Munky. How can you budget for a 30% devaluation of your currency? Who could have predicted the extent of the property crash and it’s long term consequences? Hindsight has always 20/20 vision.
The British ex-pat communities in France are suffering the same fate as Spain. Not because of a property crash but price inflation, higher taxes, expensive healthcare and poor exchange rates.
The fact is that living abroad is always going to be a riskier business than staying in your home country. I think the current generation of ex-pats have discovered that very painfully and through circumstances over which they had no control.

Yes you are probably right, it may have been a bit strong — the factors you have mentioned would have been at the high end of people’s stress testing on what could go wrong.

That said, I have seen over many years (as we all have) all those stories of expats coming to Spain to start a new life without much planning or resources and its mostly these stories I am referring to.

Then, there is the appallingly disgraceful situation of the Prior’s which no one could plan for, foresee or have to endure — which is a totally different story — a story Spain should hang its head in shame for.

[AnonymousParticipant]

@ozmunky wrote:

@logan wrote:

@ozmunky wrote:

Those Brits that are returning now are those who didn’t have or had borderline resources (without proper income plans) to move to Spain in the first place.
— Munky

I think that comment is a little unfair Munky. How can you budget for a 30% devaluation of your currency? Who could have predicted the extent of the property crash and it’s long term consequences? Hindsight has always 20/20 vision.
The British ex-pat communities in France are suffering the same fate as Spain. Not because of a property crash but price inflation, higher taxes, expensive healthcare and poor exchange rates.
The fact is that living abroad is always going to be a riskier business than staying in your home country. I think the current generation of ex-pats have discovered that very painfully and through circumstances over which they had no control.

Yes you are probably right, it may have been a bit strong — the factors you have mentioned would have been at the high end of people’s stress testing on what could go wrong.

That said, I have seen over many years (as we all have) all those stories of expats coming to Spain to start a new life without much planning or resources and its mostly these stories I am referring to.

Then, there is the appallingly disgraceful situation of the Prior’s which no one could plan for, foresee or have to endure — which is a totally different story — a story Spain should hang its head in shame for.

your talking about the ones that thought lets go and live in spain so with two grand in the bank they loaded up the car and headed over thinking they would rent and get jobs even thou they couldn’t speak the language and in some cases their job was done in a very different way in spain .

[AnonymousParticipant]

@ozmunky wrote:

@logan wrote:

@ozmunky wrote:

Those Brits that are returning now are those who didn’t have or had borderline resources (without proper income plans) to move to Spain in the first place.
— Munky

I think that comment is a little unfair Munky. How can you budget for a 30% devaluation of your currency? Who could have predicted the extent of the property crash and it’s long term consequences? Hindsight has always 20/20 vision.
The British ex-pat communities in France are suffering the same fate as Spain. Not because of a property crash but price inflation, higher taxes, expensive healthcare and poor exchange rates.
The fact is that living abroad is always going to be a riskier business than staying in your home country. I think the current generation of ex-pats have discovered that very painfully and through circumstances over which they had no control.

Yes you are probably right, it may have been a bit strong — the factors you have mentioned would have been at the high end of people’s stress testing on what could go wrong.

That said, I have seen over many years (as we all have) all those stories of expats coming to Spain to start a new life without much planning or resources and its mostly these stories I am referring to.

Then, there is the appallingly disgraceful situation of the Prior’s which no one could plan for, foresee or have to endure — which is a totally different story — a story Spain should hang its head in shame for.

your talking about the ones that thought lets go and live in spain so with two grand in the bank they loaded up the car and headed over thinking they would rent and get jobs even thou they couldn’t speak the language and in some cases their job was done in a very different way in spain .

[angieSpectator]

Ozmunky, the poor exchange rate for Brits has not been ‘short term’ so far IMO, what do you call ‘short term’? 1year, 2 years, 3 years or so?

However long it’s taken already and does in the future, is still having dire consequences for Brits abroad as well as Spanish and other Eurozone property purchase by Brits.

I would like to see rates improve for Brits too, at near parity it’s a no brainer for not buying in Eurozone countries at present because as mentioned before, Brits will overpay despite price reductions, as well as lose out again in the future when rates swing back should Brits wish to return to UK, a proverbial double whammy! 🙄

Caution is needed by purchasers now and a more even exchange rate before committing.

[angieSpectator]

Ozmunky, the poor exchange rate for Brits has not been ‘short term’ so far IMO, what do you call ‘short term’? 1year, 2 years, 3 years or so?

However long it’s taken already and does in the future, is still having dire consequences for Brits abroad as well as Spanish and other Eurozone property purchase by Brits.

I would like to see rates improve for Brits too, at near parity it’s a no brainer for not buying in Eurozone countries at present because as mentioned before, Brits will overpay despite price reductions, as well as lose out again in the future when rates swing back should Brits wish to return to UK, a proverbial double whammy! 🙄

Caution is needed by purchasers now and a more even exchange rate before committing.

[ozmunkyParticipant]

@angie wrote:

Ozmunky, the poor exchange rate for Brits has not been ‘short term’ so far IMO, what do you call ‘short term’? 1year, 2 years, 3 years or so?

However long it’s taken already and does in the future, is still having dire consequences for Brits abroad as well as Spanish and other Eurozone property purchase by Brits.

I would like to see rates improve for Brits too, at near parity it’s a no brainer for not buying in Eurozone countries at present because as mentioned before, Brits will overpay despite price reductions, as well as lose out again in the future when rates swing back should Brits wish to return to UK, a proverbial double whammy! 🙄

Caution is needed by purchasers now and a more even exchange rate before committing.

Yes, by “short term” I mean 18 months — it will take this long for the EU problems to work themselves through.

By medium term I mean 3-5 years.

Long Term is 2015 onwards.

Anyone buying a property until Spain cleans itself up is “losing out” for a whole host of reasons — its just that the toxicity of a property purchase to your wealth isnt obvious when you buy it until its too late and you become tax resident and other targets for the Spanish system and practices.

People who rent until they no longer need a property in Spain will be the winners by a long shot as they will have de-risked their situation dramatically.

[ozmunkyParticipant]

@angie wrote:

Ozmunky, the poor exchange rate for Brits has not been ‘short term’ so far IMO, what do you call ‘short term’? 1year, 2 years, 3 years or so?

However long it’s taken already and does in the future, is still having dire consequences for Brits abroad as well as Spanish and other Eurozone property purchase by Brits.

I would like to see rates improve for Brits too, at near parity it’s a no brainer for not buying in Eurozone countries at present because as mentioned before, Brits will overpay despite price reductions, as well as lose out again in the future when rates swing back should Brits wish to return to UK, a proverbial double whammy! 🙄

Caution is needed by purchasers now and a more even exchange rate before committing.

Yes, by “short term” I mean 18 months — it will take this long for the EU problems to work themselves through.

By medium term I mean 3-5 years.

Long Term is 2015 onwards.

Anyone buying a property until Spain cleans itself up is “losing out” for a whole host of reasons — its just that the toxicity of a property purchase to your wealth isnt obvious when you buy it until its too late and you become tax resident and other targets for the Spanish system and practices.

People who rent until they no longer need a property in Spain will be the winners by a long shot as they will have de-risked their situation dramatically.

[AnonymousParticipant]

@ozmunky wrote:

People who rent until they no longer need a property in Spain will be the winners by a long shot as they will have de-risked their situation dramatically.

Interesting point you have made there and one I have always agreed with. I remember reading not so long back on this forum someone asking about whether they should rent and stick it out for a few years or sell up at a possible loss, (this would mean for most people owing the bank for years to come!)
and the general responses were to sell up now as they would stand to lose a lot more in the future…

I personally have opted for the renting and sticking it out as I did not want to spend the next 20 years paying the bank money for something I no longer own.
Not sure for how long I am going to have to continue renting until I can sell though….I know its a long shot but…any ideas how many more years until I can even consider a sale without a loss??? not looking to make a profit, just selling for what I purchased it for really.

Would be nice to hear or see a glimmer of positive news on the horizon..

[AnonymousParticipant]

@ozmunky wrote:

People who rent until they no longer need a property in Spain will be the winners by a long shot as they will have de-risked their situation dramatically.

Interesting point you have made there and one I have always agreed with. I remember reading not so long back on this forum someone asking about whether they should rent and stick it out for a few years or sell up at a possible loss, (this would mean for most people owing the bank for years to come!)
and the general responses were to sell up now as they would stand to lose a lot more in the future…

I personally have opted for the renting and sticking it out as I did not want to spend the next 20 years paying the bank money for something I no longer own.
Not sure for how long I am going to have to continue renting until I can sell though….I know its a long shot but…any ideas how many more years until I can even consider a sale without a loss??? not looking to make a profit, just selling for what I purchased it for really.

Would be nice to hear or see a glimmer of positive news on the horizon..

[angieSpectator]

Good points Ozmunky about ‘other targets for the Spanish tax system etc’ being valid reasons not to buy yet until their Gov’t addresses these issues properly.

Totally agree with Jonas and you too that renting is the best option currently, at least you’re not in negative equity and haven’t lost money on your investment, and rentals are cheap if you look around in Spain. 😉

[angieSpectator]

Good points Ozmunky about ‘other targets for the Spanish tax system etc’ being valid reasons not to buy yet until their Gov’t addresses these issues properly.

Totally agree with Jonas and you too that renting is the best option currently, at least you’re not in negative equity and haven’t lost money on your investment, and rentals are cheap if you look around in Spain. 😉

[katySpectator]

I wouldn’t call the fall in sterling short term. It has been in the doldrums now for about 3 years. From the year 2000 to around January 2007 the pound was as high as 1.70 to euro with a low of 1.50. Since early 2007 it has been on a downward spiral and by December 2009 had fallen to 1.09!

If an average of 1.50 taken over 7 years anyone with a yearly income of £25,000 would have had 37500 spending power. Take an average of 1.15 over the past 2 years then spending power is only 28750. A considerable drop in income at a time when prices in Spain have rocketed. Ok if people are paid in euros but most ex-pats seem to rely on UK income.

[katySpectator]

I wouldn’t call the fall in sterling short term. It has been in the doldrums now for about 3 years. From the year 2000 to around January 2007 the pound was as high as 1.70 to euro with a low of 1.50. Since early 2007 it has been on a downward spiral and by December 2009 had fallen to 1.09!

If an average of 1.50 taken over 7 years anyone with a yearly income of £25,000 would have had 37500 spending power. Take an average of 1.15 over the past 2 years then spending power is only 28750. A considerable drop in income at a time when prices in Spain have rocketed. Ok if people are paid in euros but most ex-pats seem to rely on UK income.

[AnonymousParticipant]

Katy, hence my earlier posting 2417. The days of £= €1.70 were there because € was a new currency floated on a massive scale and without going into the two track economiesi.e. north & south of EU. The market built in a risk factor to it. As the situation stabalised the spread narrowed.

Without boring the readers in a few sentances. € is a safe currency due to the state of the $ & our economy is lying horizontal, low interest rates is providing a prolong kiss of live.

I do not expect any movement in our favour until the above changes. I have seen that today currency, gold & oil market moved today on the news of the death of Bin Laden. It just shows how much they are clutching to news no matter how irrelevent it is.

[AnonymousParticipant]

Katy, hence my earlier posting 2417. The days of £= €1.70 were there because € was a new currency floated on a massive scale and without going into the two track economiesi.e. north & south of EU. The market built in a risk factor to it. As the situation stabalised the spread narrowed.

Without boring the readers in a few sentances. € is a safe currency due to the state of the $ & our economy is lying horizontal, low interest rates is providing a prolong kiss of live.

I do not expect any movement in our favour until the above changes. I have seen that today currency, gold & oil market moved today on the news of the death of Bin Laden. It just shows how much they are clutching to news no matter how irrelevent it is.

[loganParticipant]

Jonas writes:-Would be nice to hear or see a glimmer of positive news on the horizon..

Well as Ozmunky writes renting will give you an edge when interest rates rise as the ECB is determined so to do.
That’s positive. Paying rent is far better that being stuck with a devaluing millstone you cannot sell, which keeps you anchored and paying higher interest charges.
Interest/Rent what’s the difference when there is no rising capital gain?
In terms of world markets there is hardly any real good news unless you have a strong position in gold or oil.
There is also much speculation that Greece will soon announce a major restructuring of their economy. Which in plain language is a default on it’s debt.
The PIIGs economies will almost certainly need further financial support from the EU bailout fund.
It’s said the IMF and the ECB are currently working on a plan to lessen the global impact of such a scenario.
If this happens the Euro will collapse, commodities will rise even further.
More worrying it could trigger a collapse of equities sending the world into another deep recession.
Will it happen? I have no idea.
The fact that it’s even a possibility is an indication of how far the worlds economies have travelled south.
The USA, the usual driver of world prosperity and holders of the world’s reserve currency is burdened by trillions of dollars of debt.
Positive news Jonas? In financial terms nada.

[loganParticipant]

Jonas writes:-Would be nice to hear or see a glimmer of positive news on the horizon..

Well as Ozmunky writes renting will give you an edge when interest rates rise as the ECB is determined so to do.
That’s positive. Paying rent is far better that being stuck with a devaluing millstone you cannot sell, which keeps you anchored and paying higher interest charges.
Interest/Rent what’s the difference when there is no rising capital gain?
In terms of world markets there is hardly any real good news unless you have a strong position in gold or oil.
There is also much speculation that Greece will soon announce a major restructuring of their economy. Which in plain language is a default on it’s debt.
The PIIGs economies will almost certainly need further financial support from the EU bailout fund.
It’s said the IMF and the ECB are currently working on a plan to lessen the global impact of such a scenario.
If this happens the Euro will collapse, commodities will rise even further.
More worrying it could trigger a collapse of equities sending the world into another deep recession.
Will it happen? I have no idea.
The fact that it’s even a possibility is an indication of how far the worlds economies have travelled south.
The USA, the usual driver of world prosperity and holders of the world’s reserve currency is burdened by trillions of dollars of debt.
Positive news Jonas? In financial terms nada.

[Author]

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