30 second briefing: UK house prices vs Spanish house prices
Economic problems in Spain have dented property prices in the country. How does this compare to house prices in Britain?
Sunshine doesn’t pay the bills: for younger families who moved to Spain when the going was good, it is becoming increasingly difficult to make a living
House prices are down 30pc since 2007, according to the Bank of Spain Photo: Alamy
By Money reporters
The economic problems in many European countries have dented property prices. This is particularly true in Spain, where a construction and credit boom before the financial crash has ground to a halt. As a result, house prices have slumped.
House prices are down 30pc since 2007, according to the Bank of Spain. They are still falling by up to 14.5pc a year, with the coastal regions popular with British and other international buyers recording some of the biggest falls, according to Sociedad de Tasación, a surveyor.
Many Spanish banks, which were happy to grant mortgages to British buyers in the boom years, are now calling in debts. This has trapped buyers who can no longer meet mortgage payments – perhaps because they cannot find work or their pension no longer covers the repayments in euros – since they are unable to sell the property to cover the debt.
Some properties are being repossessed and sold on by the Spanish banks at knock-down prices. This is making it harder for those looking to sell to get a decent return on their investment, particularly if the pound continues to strengthen against the euro.
In stark contrast, property prices in the UK are rocketing. British property sales in the first three months of 2014 reached a six-year high as the market recovered on a “truly national” scale, according to the Royal Institution of Chartered Surveyors (Rics).
Activity is at levels last seen in early 2008, before the banking crisis took hold, and is spreading to the Home Counties and beyond, figures suggest.
Rics’ 513 branches of estate agents and valuers in England and Wales reported average sales of 23 properties each in the first quarter of the year. This is up from a low of 12 in 2009. In mid-2007, the peak of the last housing boom, chartered surveyors were selling properties at a rate of about 40 per quarter.