The UK has just come out of recession but there is still a lot of belt-tightening. Pay rises are frozen or cut and house values are nowhere near people’s expectations. The banking crisis made people afraid and the falling pound has made foreign holiday homes more expensive.
And the UK media has made hay of the corruption in the Spanish housing market, the demolitions and land grabs are widely known, and most people in the UK will know someone who has returned from Spain in the last few years when their dream of living in paradise faded.
I think that mostly it’s the fall in the value of the pound, a Spanish holiday is now 30% dearer and Turkey, as an example, is a cheaper alternative.
In my area, over Easter, there were fewer holidaymakers from the UK than ever before, but that’s only a personal observation.