[Purplemurph]

I am very new to the world of Spanish property/lifestyle so am appealing to your collective wisdom, Insightful Ones:)

I am 49, have recently separated, no savings but with cash due from sale of house in UK and am ready for a move to Spain. My retired parents live in Murcia but I’m not keen to make a permanent move that far South. (Too hot. Arid. Not close to major cultural cities and caters to a mainly retired demographic).

I’m looking for a cash buy not mortgaged. However, my budget is small (£80k) and I realise that this limits my options in my preferred areas further North (Costa Brava or Daurada) though I have spied some property at good prices in extreme North of Costa Blanca in Denia/Gandía. (I need something with 3 bedrooms or 2 beds and a study/studio space for my work and one room to rent out).

So:

Should I rent for a while in my preferred areas (Costa Brava/Daurada) and build up some funds through work till I can afford something to buy there?

Or buy cheap in the next few months (before the property prices go up) further south and use the potential rental income to fund my lifestyle (supplemented with other freelance work) until I’m ready to move North later.

Or any other advice/suggestions welcome. Particularly if anyone has any thoughts on Denia and any other areas I might consider as an alternative to more expensive North.

Many thanks

P

[Chris Nation]

Hello P

In the photography business, arriving at a location with the weather dismal and grey, the locals always said, “You should have been here last week. It was lovely!”. By great good fortune I bought my Euros last Dec. For once I was indeed “here last week”.

You are contemplating a move into a Eurozone country when GBP is tanking. Uncertainty will infect the UK’s political and financial organism for some years. Nobody knows what will actually eventuate out of Brexit but one thing we know is – uncertainty rules. Uncertainty is a cast iron guarantee of a spooked fx market for any currency. This state will persist beyond the actual exit date. The UK economy will be finding its place in the post-Brexit world.

This should seriously be taken into account. I had exactly the same amount as you for my spend on property. At the rate I exchanged GBP to €, back in Dec, I have been able to buy a small flat in Valencia city centre (in a rather dog-eared building but a superb location) and budget €20k for renovations. That €20k and more has ‘disappeared’ with the fall in GBP. The up-side for me is that at the present fx rate, going back the other way, € to GBP, would refund my renovation costs, in theory. Meanwhile my derisory pension has taken a massive hit.

If I was in your position now, if I moved to Spain at all (questionable, that), I would not buy. I would rent, see how things develop with Brexit and fx and not commit to buying until it seems safe to do so. This might take years.

As to where, I can only speak from my experience. I’d been coming to Valencia city for 15 years. I knew it was the place for me – I prefer city life to the campo – and prices were (and I believe still are) continuing to sag gently downwards. There are numerous attractive small towns in Valencia province. You mentioned Gandia – that’s one. Xativa is a charming place.

But the main thing is to protect your modest stash. With Santander UK about to halve its savings rate (on up to GBP20K) from 3% to 1.5% on 1st Nov, there isreaally nowhere to go  that produces a meaningful return. As usual, the UK property market is one. Ironically, Spanish property might be another reasonable punt. After plunging to the depths, the only way is up and, give or take, (keep an eye on Mark’s multi-source prices graph) up is the tend. Now the Spanish politicians have agreed to a minority coalition government, a tad more stability might be evident in an economy that has already shown signs to being growing faster that any other in the €-zone.

I can’t help but hear that thing ringing in my ears, “You should have been here last week.”

[Mark Stücklin]

Good advice from Chris as always.

I would say definitely rent before buying. I don’t think house prices will rise much, if at all, in the areas you are interested in. And you never know, the pound might stage a recovery in the meantime, leaving you with a bigger budget if you decide you do want to buy after living there for a while.

[Anonymous]

The suggestion to rent a property until you are sure where you want to buy is a sound one. The other decision to make is in what currency your savings should be held. I feel that sterling has a greater chance of falling further against the euro and dollar so the sooner you convert to another currency the better. You may also consider consulting with a financial planner, not a stock broker, who you pay for advice. Whatever you do you have to be comfortable with the level of risk that you will assume.

[Purplemurph]

Thanks everyone. Renting seems a sound idea until the lie of the land is clearer.

P

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