Spain digs into their debt mountain

If you thought the new British coalition government was off to a flying start to cut the growing debt mountain and save the nation, better look at what the Spanish Government has been up to in the same period.

Two countries trading on over-priced properties and suffering from the fact the affordability level has been reached; two countries suffering from their highest unemployment levels; two countries pole-axed by Left-wing Socialist public sector overspending; two countries sharing the biggest tourism market in Europe as Brits continue their three decades relationship - and the Spanish get the lolly and the jobs.

Now the UK has seen the light and a new Government is promising to turn things around and the Spanish Government, with a general election due within the year, has seen what has happened to fellow impoverished travellers Greece and to the UK's failed Labour Government and decided enough is enough.

So there’s to be a new wealth tax on people with “high-economic capacity” as a sop to the less well off, who like their UK counterparts, are likely to be hammered under new austerity measures designed to reduce the Spanish deficit from 11.2% to 3% by 2013. Likely revenue is around EUR 2 billion, based on similar wealth tax abandoned in 2008.

The Spanish Government has got approval for a EUR 15 billion austerity package that includes wage cuts of 5% for civil servants just when the economy, like that of the UK, is just crawling out of the red. With the third largest deficit in Euroland Spain is hoping the move with have a calming effect…

Spanish banks, feeling the pain of their excessive lending in the property sector for the last decade made their first big move as four Spanish regional savings banks, led by Caja de Ahorros de Mediterraneo, reached a preliminary agreement to merge some of their operations.

The agreement, which also includes Cajastur, Caja de Extremadura and Caja Cantabria, would aim to create a joint banking group that seeks to “strengthen solvency and assets of the participating banks”. The move followed the Bank of Spain taking control of another savings bank Cajasur after trade unions blocked a planned merger with Unicaja.

Finally, there is to be a massive clampdown on motorist lawbreakers with increased on the spot fines and non payment collection extended to four years because 40% of traffic fines have never been paid in Spain. The Interior Minister said: This doesn’t mean that we think that we are going to make more money out of fines”. Where have we heard that before?

The property market is strengthening as increasing numbers of bargain hunters fly to buy in Spain and find Spanish bank repossessions at discounts of up to 50% and such outstanding loan to values that 90% mortgages are on offer.

Over-50s can quit UK for just £25,000

Prime Minister McBroon is in a right pickle, having had his clapped-out New Labour saved by an £11M investment from clapped-out, seventies-style Old Stalinists in the Unite trade union, it’s now payback time.

McBroon is using the union’s cash to fight the next election and carry on with his crazy government of the Britain he has ruined. To make sure he toes the Militant Tendency line, Unite has set up a manned desk in Number 10 itself and hired McBroon’s disgraced attack dog publicist, Charlie Whelan, as their “political director”.

For many Over-50s it’s a clear throwback to the Seventies when Labour was controlled by the unions and strike-bound Britain ground to a halt. Only this time around the country owes billions more and the level of corruption is even greater. Cameroons posters show “Cash Gordon” hiding wads of Unite cash behind his back and wearing a pilot’s uniform with his cap badged Unite – even as British Airways fight off the union’s strikers.

Nobody got to vote for McBroon when he claimed the job of Prime Minister, nobody would have, if they’d known he was a stooge of militant trade unionists, back on parade after 30 years licking their wounds in the political wilderness.

Surely no sensible voter will vote for Labour Unite in May…but don’t count on it.

Over 50s are in pole position to quit the Britain that will be awash with soaring taxes, declining services, pensioner penury and aggressive trade unions claiming more desks in Downing Street. Brits approaching retirement can grab their assets and head out to a sunbelt country like Spain and take control of their golden years…

Staying in Britain, they are likely to face a decade of chaos, disorder, strikes and industrial unrest, causing Sterling to sink even lower against the Dollar and Euro and prices and interest rates to soar. Fixed incomes can’t cope with that scenario.

Things might be better if the Cameroons win, but they don’t have a magic wand to undo the knots of public debit that will strangle the future prospects of millions, specifically the Over-50s and pensioners.

There is an alternative... A small investment in a property in Spain can provide a useful bunker as the war of attrition rages in the UK and it can be occupied strategically or full-time.

PropertyInSpain.Net and a group of Spanish banks are planning to launch special deals for Over-50s and pensioners that needs only £25,000 from UK savings to own a two or three bed property worth £100,000 in a good location on a choice of Costas.

The scheme is expected to offer maximum flexibility over the next decade – breadline chaos in Blighty or laid-back, Med lifestyle in Spain…

Brit pensioners quitting Never-Never Land

Thousands of Over-50s and pensioners are in despair over their futures as they note the daily pronouncements of the ruling McBroons and wannabe Cameroons on how to fix the fiscal mess in which the UK wallows.

Likewise the decline in public service standards and a real threat to day to day living as deep budget cuts strangle services are major concerns.

Whatever the outcome of the General Election, living in Britain is going to be tough, specially for those on fixed incomes thinking about retirement. Neither McBroon, who started off by selling our gold reserves for a quarter of today’s price and has gone steadily downhill since, nor Cameroon hold a magic wand to divert us all from their Never-Never land of national debt and family hardships.

So shall we go or shall we stay is going to be the big debate?

While what happens in the UK over the next decade of paying down the McBroon borrowed billions is unknown, there is a place with a lot of “knowns” that is tempting many over 50 and retirement couples to emigrate.

Spain offers a lifestyle that attracts tourists and property owners like no other place on earth:

 Year round warm weather even during the often balmy winter months.
 Excellent sporting facilities including the favourite pastimes of golf and water sports.
 A stable and caring Spanish society that welcomes and respects others, especially the elderly and very young.
 Excellent infrastructure of roads, railways, modern free health facilities for EU citizens.
 Two-hour flights from nearly 20 UK airports to mainland Spain, a bit longer to the Balearics and Canary Islands.
 Superb local food with the Mediterranean diet becoming so popular as a healthy diet with ingredients that are fresh and plentiful.
 Very few problems for non-Spanish speakers as English is now the second language of Spain.

The above benefits are fixed and not subject to market fluctuations nor the vagaries of McBroon that have deleted the “Great” from Great Britain and messed up the lives of millions of its citizens.

Spain’s biggest mistake was allowing over capacity in its important property sector and that means a bigger choice of genuine bargains from hard-pressed developers and Spanish banks with many repossession bargains to offer Brits and other north European buyers.

Many of these villas and apartments are ideal for fulltime living or as 50-50 homes for couples wanting to avoid drab UK winters and the inevitable depressing economic climate in the dark years ahead.

Demolition property pain in Spain

The public relations contrast between Dubai and Spain was emphasised quickly enough in the first week of 2010 when the world’s tallest building went up amid a blaze of world publicity and the new homes of Brit buyers were battered down by bulldozers.

The rulers of Dubai called up 10,000 fireworks, sky divers and a laser light show to shore-up their broken property sector and tell property buyers the market would return and their investment would pay-off.

Town halls in Costa de la Luz and Almeria called up the bulldozers to demolish new homes, legally licensed by a previous corrupt administration. The negative message was summed up in media headlines like “Happy New Year – we’re going to bulldoze your homes” whereas Dubai got positive coverage worldwide.

The house-building industry is vital to the economies of both countries but is decimated by over-supply and recessional woes. Every sale is important to Spain and Dubai and these need confidence in the market. Some buyers will get their fingers burned in both countries as prices have dropped by 30% or more, but for others, that is an opportunity to buy in cheaply, sit back, ride the storm and get a decent return in 3-5 years.

Spanish property experts have warned about the illegal building in Almeria and Costa de Luz for years and early buyers moved in to homes with only builders’ supply of power and water. They often lost even this when the builder went bust or pulled the plug.

The Socialist Spanish Government has done little to help and has largely stood back as new regimes in the town halls have been left to their dirty work. They intervened directly in Marbella where 1,000s of illegal properties (corrupt and jailed town hall officials) have been made legal retrospectively and a massive dossier of these is available to the lawyers of all prospective purchasers.

That is good for the market, provides reassurance to buyers who can now snap up repossession bargains from Spanish banks and hard-pressed developers keen to unload completed stock.

But to ignore the plight of innocent buyers in other areas seems suicidal; to allow new rival on the block Dubai to provide added confidence to buyers while failing to follow suit, results in more pain and new questions on the safety and stability of the Spanish property market.

According to Abusos Urbanísticos Almanzora NO, a local group (see image above) representing homeowners with “precarious legal status” in the area “the authorities still fail to recognize the enormous damage that this scandal has caused to Spain’s reputation both at home and abroad.”

Local municipalities' insistence on tearing down the homes of owners who purchased their property in good faith is “economic suicide,” the organization argues. Negative publicity alone should make the Government and authorities rethink the threats, Spanish honour should result in full, immediate compensation for owners and all illegal development should be listed online.

Spanish property bargains window for 2010

There is still a “window of opportunity” for some bargain property purchases in Spain as that country’s economy, like that of the UK, shows little sign of recovery at the start of the New Year.

Just two months ago the European Commission assessed the fiscal state of play and stated: "Spain's weaknesses over the developing crisis reflect mainly the reversal of the continuous domestic demand expansion of over a decade, which was associated with high indebtedness of the private sector, large external deficits and debt, an oversized housing sector compared with the euro area average and fast rising asset prices, notably of real estate assets."

Some economists are likening the parlous states of Spain and the UK, the only major economies still officially in recession and deciding that “recovery over the next 12 months will be gradual and drawn-out”.

While the UK housing market remains depressed, due to a lack of buyer confidence and shortages of good mortgages, the reverse is true in Spain. There are many bargains as a result of the recession and this means loan to value deals of up to 80 percent. Many properties are now owned by Spanish banks who just want to get back any outstanding mortgages or the loans to developers and house builders.

House sales in Spain are down 25% from their peak in 2007, but that is still a whopping 300,000 a year and with some 75,000 Spanish bank repossessions dripping into the market place there are likely to be real bargains around during 2010.

There are many Spanish buyers snapping up these bargains because research (see chart) shows, despite the recession hardships, they are pretty hopeful at this point that the worst of the economic crisis is now behind them. Confidence may not be not back to its old pre-crisis level, but it is now well up from its July 2008 low point.

The Russians, Scandinavians and Dutch are in there too, often with ready cash, because they still believe Spain offers good medium term investment returns as one of the world’s leading tourist destinations and is a great place to live for those planning retirement or full-time relocation.

Brits share those views of Spain, but seem to be holding back from the bargains on offer because they somehow think prices will drop even more. Some prices probably will go down further, but only on property in inferior locations or condition. The best deals, as ever, are based on the old maxim, “Location, location, location” and these apartments and villas are going first, often with several would be buyers chasing the same bargain.

Late last year some newly confident developers actually increased prices of their key ready homes after securing a succession of sales. Sometime in 2010 this demand will start to move key ready and repossession prices upwards, widening the gaps between good, bad and indifferent properties and the window of opportunity will start to close…

Offplan property deposits legal successes

The offplan boom that fuelled the Spanish real estate market for nearly a decade may have ended with the arrival of the recession, but the consequences for some unsuspecting buyers lingers on in ongoing disputes.

Currently, savvy buyers are favouring the key ready bargains from hard-pressed developers and Spanish bank repossessions where even bigger discounts are available. Conversely, 100s of buyers from the Offplan Years are still waiting for delivery of their long promised homes or the return of hard earned deposits they handed over in pursuit of their Life in the Sun Dreams.

One of the worst developer offenders was Aifos Promociones, who were recently wound up by the Spanish Courts, and whose directors were jailed for corruption. They seemingly bribed local mayors to get their hands on prime sites in Andalucia, drew up plans for exotic resorts and sold these concepts to unsuspecting buyers, who handed over hefty deposits on the promise a “Manana building licence”.

Agents like specialist PropertyInSpain.Net were recruited to the cause and deposits rolled in from across Europe, enabling the Aifos directors to enjoy a playboy lifestyle and produce a glossy lifestyle magazine to report on their “successes”.

But as few building licences emerged PropertyInSpain.Net because suspicious and asked Spanish lawyer, Javier de Juan to confront Aifos at their Malaga HQ and attempt to obtain licences or regain client deposits. After numerous meetings he was successful in regaining all deposits paid over on disputed developments, despite the fact the developer claimed they were so big they didn’t need to have bank guarantees in place to protect buyers deposits.

Buyers were delighted to get their money back, the website was able to protect its good reputation, but had to forego the retained commissions for the collapsed sales.

Now, in another campaigning website, Eyeonspain.com another couple pursuing the sunshine property dream, detail how they were successful in regaining their “lost deposits” when the legally required bank guarantees were in place. They too put their success down to the efforts of a tenacious Spanish lawyer, in this case, Mario del Castro, daughter of a leading planning legal specialist.

It’s a good example of how to use the cumbersome Spanish legal system to beat developers who think they are above the law and this tale should encourage others. The article also includes warnings on not what to do when buying a property in Spain.

McBroon’s fiscal porridge

The Spanish property market appears to have reached a watershed moment in time with reports that the collapse in prices might be bottoming out, based on sales of more than 500,000 properties in the last 12 months, and British buyers finally having to realise the once mighty Pound now only buys one now mighty Euro.

Despite the world recession property sales have dipped by only 20% thanks to heavy discounting by developers, Spanish bank repossessions and British vendors taking reverse advantage of the 30% exchange rate decline.

It’s been a buyers’ market for many months and 10,000 deals a week across Spain provide strong evidence that the more realistic prices and extra low interest rates have attracted the bargain hunters, but with many hesitating Brits hoping for further falls.

If September 2009 proves to be the watershed, then they will have missed out on the real bargains like 2-bed apartments for EUR 74,000 and 3-bed villas from EUR 140,000. While continuing to “look before they leap” 1,000s of British couples intending to buy a property in Spain, have suffered a double whammy as Sterling has plunged and is now unlikely to get better than parity for years.

The decline in the Pound is a direct result of McBroon’s fiscal porridge, that has brought Britain within a caber-toss of bankruptcy with savage budget cuts admitted for the first time by this patently dishonest bunch of incompetents…

It seems the Swiss, who know better than anyone how to manage the economy, are forecasting the continuing decline of Sterling as big corporations quit the sinking ship, now driven onto the rocks with the bungling McBroons at the wheel. They also point at the 800 billion pounds worth of borrowing to bale out the banks and the mismanaged British economy and pose the question: “Who would lend more money to this UK Government”?

Buyers who haven’t yet taken a view trip to Spain to select the last of the real bargains are unlikely to see house prices drop further, but extremely likely to see their buying pound shrink in their pockets. Over-50s need to move fast to secure a Spanish property investment.

The other half of their Hobson’s Choice is to stick with the McBroons fiscal porridge and watch as Spain follows Germany and France into better economic state, house prices recover from their 30% dip and life returns to normal with generous dollops of Med lifestyle and sunshine.

Why Brits are still quitting Britain

While Brits living in France and Spain are feeling the pinch because of the decline in the Pound, many others are still planning to move away from the declining state of once Great Britian.

An American correspondent in yesterday’s New York Times, commenting on Brit emigration, spoke for many over-50s when he wrote: “I can well understand why folks want to abandon Britain, where a person can’t smoke or own a gun or derogate a religion (even in private conversation), or spank one's child, or avert one's face from any of that country's 10 million CCTV cameras.

“I always thought Orwell's book (1984) represented a dystopia, but now the Brits have accepted it as their constitution.”

He didn’t mention the poor healthcare, inadequate education, ruined pension industry, unwanted currency, gun-toting teens, criminal under-class, corrupt politicians, open borders, nor an unelected leader deciding what the now angry populous wants.

But just as stoic, ex-pat Brits will sit out the currency and financial crisis affecting their lifestyles in continental Europe, those still to leave will go-ahead with their plans and take advantage of the downturn in house prices, that more than compensates for the currency losses.

In Spain they will find excellent value villas and apartments in established residential areas at prices 25% to 50% below valuation, buying direct from banks who have not had Government bail-outs because of mismanaged growth efforts.

Over-50s will notice that three ailing British banking institutions are going to carry the Santander name and be integrated in a 14,000 branch network across 40 countries. The boss of Santander was the only top banker not required to offer an apology to the Parliamentary committee investigating the banking collapse as no client money went into dodgy banking scams.

By contrast, Brit rivals have been bailed-out by the UK Government who failed to supervise their more dubious actives as they strove for world domination...

Along with sunshine, siestas and relaxed lifestyle, Spain offers stability, sound banking and good healthcare. What more could the over-50s or pensioners want for?

Their property search starts here, with specialist over-50s active life resorts, developments with guaranteed rentals, or heavily discounted repossession bargains from Spanish banks and and hard-pressed developers.

Tax breaks for all in Spain

The McBroon Clan of Scottish ministers and sporran-hanging MPs, having ruined the British economy, have now been exposed as tax dodgers with many of them getting taxpayers to pick up the bills from the accountants they hired “to make sure we were paying the correct of amount of tax”.

For “correct” read “minimum”. And the worst offender appears to be Alistair Darling, the man in charge of tax matters and who recently declared war on tax havens and all those business people using them.

Since he and his predecessor as chancellor, the head of the McBroons himself, came to power they have increased the tax burden on the British citizenry to the highest levels for decades. So why should the rest of us part with a penny of the ever-increasing taxation being demanded by a man who doesn't pay his own fair share?

McDarling's tax avoidance was revealed by the Daily Telegraph because his expenses claims showed that he'd 'flipped' his designated second home - the one on which he could claim running costs from the taxpayer - four times in four years.

In 2004, when he was Secretary of State for Transport, Mr Darling claimed that his main residence was a small flat in Lambeth, owned by Lewis Moonie, a fellow Labour MP. Mr Moonie - another part of the spider’s web of Scottish McBroon MPs - had bought the flat from Gordon Brown.

But for McDarling, designating this flat as his main residence - despite the fact that his wife and children lived in Scotland - allowed him to bill taxpayers for the upkeep of his much larger Edinburgh house, bought for £570,000 in 1998…

It would take an accountant to unravel such a web of deceit and maximise the tax avoidance, so it’s no surprise he hired one and put his fees on the taxpayer’s tab. The saga is detailed in the Daily Mail and is worth reading.

Also worth reading for taxpayers planning to invest some of their cash the McBroons have not yet grabbed, is an article on how to buy a bargain property in Spain – including Spanish bank repossessions – and avoid all the McBroon property taxes. No capital gains tax – benefit enjoyed by McBroon and other MPs – and no inheritance tax, no currency exchange problems etc.

The scheme is called Libertad – Spanish for Freedom – and more Brits are planning to follow the example of the McBroons and minimise the amount of tax they hand over.

Spanish practices in perks and property...

There was a bit of an image problem for Spain when trade unions called the shots in Seventies Britain by demanding more money for less work, layered with a load of bosses' perks.

It was likened to traditional similar practices in Spain and the insult stuck, despite that country subsequently becoming a dynamic Med powerhouse with a strong economy, 21st century communications, and the leading tourist destination and international property market.

Margaret Thatcher kicked the trade unions and their “Spanish practices” into touch, resulting in the strongest-ever Britsh economy as inherited by the incoming McBroon government.

Now the country is looking busted with £750 billion of debt and wracked by the parliamentary expenses scandal, the media has harked back to the Seventies for the ultimate sobriequet "Spanish practices" to describe the fiddles and scams of McBroon ministers and MPs from all parties.

The unspeakable Mick Martin was cast in the role of the old trade union boss, living it up with the free big house and chauffer cars and encouraging the Honourable Members to claim for the maximum on the taxpayers’ tab...

When the House of Commons members were exposed as “indulging in old-style Spanish practices”, the shop steward simply had to go. Commentators, such as the BBC’s Nick Robinson - their one terrier in a team of political poodles - have used the “Spanish practices” phrase and it has been revived in the minds of the general public.

But it should now carry the different usage and meaning. The last time a Spanish Government lied to its citizenry – “ETA blew up commuter trains in Madrid” - it was swept from office within weeks.

That’s one “Spanish practice” that could be useful in ridding Britain of the failed McBroons and their poor governance, ongoing spin, failed fiscal policy and downright dishonesty. Over-50s in Britain remember clearly the benefits of renewal process started by the incoming Thatcher government... they’d like to see similar sooner rather than later.

Meantime, they are becoming more aquainted with the practice of buying property in Spain, cashing in on that country’s recessional woes, such as Spanish bank repossessions and other distressed sales. Over-50s reckon spending more time out of Britain might be better for their health, welfare and wallet.

Brit over-50s bag Spanish bargains

The Spanish bit of the world recession may be easing – in contrast with the UK where the McBroon Government, slowly imploding amid expenses and other scandals, has failed to get a grip on economic matters.

The McBroons have been feathering their own nests and lining up nifty pensions for ministers and MPs while British families, the over-50s and pensioners feel the economic pinch and face the prospect of being highly taxed forever to repay the £750 billion debt mountain built up.

Those who are still able to do so are planning their futures on the basis that the McBroons have wrecked the British economy, will lose power and the Cameron Clan will still need a decade to clear-up the mess. The taxpayer, you might imagine, will be the biggest contributor…

Meanwhile in Spain, government action seems to be having a greater effect as the economic power driver, the property market, is becoming brisker. Buyers from Spain and northern Europe are taking advantage of the massive price falls and the many bargain Spanish bank repossessions.

1,000 sales a week is a lot better than the levels in the UK market and an increasing number of the buyers are Brit over-50s planning for their retirement and using savings to invest in a place in the sun sooner rather than later. Their families can enjoy holidays in a villa or apartment bought for a bargain price and then it can be used for part-time or fulltime living nearer or after retirement.

Leading Spanish property website, Kyero summed up the three latest reports on the local economy as follows:

• Things are still getting worse
• But they're getting worse more slowly than before
• This means we're nearing the bottom of the curve
• After reaching the bottom, the only way is up

Whether you prefer short term pessimism, long term optimism, says Kyero, the time is right for the EU to force Spain to repeal it’s “shoddy property laws” as this will help get the market back to normal much quicker.

Buying now would seem to be a good option and newly completed developments like Mojón Hills Resort in unspoilt Murcia offer unbeatable packages that include big discounts off current valuations, 90% mortgages and guaranteed rental deals for three years.

Investors return to the Costa del Crook

There are signs of life returning to the Costa del Sol property market, where crooked mayors, lawyers and developers got their come-uppance for the decade when they were kings of the Costa, handing out planning licences and largesse and helping themselves to millions of graft euros in the process.

They are disgraced and/or jailed and the new central government installed council running Marbella has cleaned out the stables and is now restoring confidence in the market, where there are many distressed bargains for savvy investor buyers.

Things are also looking safer and better in these nearby troubled areas:

Alhaurín el Grande – Where the PP party is at the centre of the Troya case.
Estepona – Where the Socialists face the Astapa case.
Manilva – Ballena Blanca money laundering case affects the local PDEM party
Gaucín - Ex Partido Andalucista Mayor banned from public office for seven years.
Cómpeta - Where the PP ex Mayor has been banned for seven years.
Tolox and Ojén - Prosecutor wants to see both Mayors from the Partido Andalucista and PSOE Socialist party serve two years in prison.
Ronda – Merinos case the left wingers IU have complained about the PA.
La Viñuela – The Socialist Mayor faces a possible 18 months jail.
Sayalonga – The Socialist Mayor is charged.

The investors are returning and some are seeking multiple buys at knock-down prices and this can help kick start the market again. One group, who have been in touch, will buy packages of ten 2-bed apartments and packages of twenty 1-bed apartments in prime locations along the Costa.

Any banks or sellers with suitable bargains should contact the main brokers involved.

They have spotted the very real opportunities to buy “distressed” property at heavily discounted prices coupled with the lure of the sun, the golf and crystal blue water. However, it’s clear that these informed buyers will hold their “Caveat Emptor” banner high in the air – they will not be conned, ripped off or mislead by a dodgy Town Hall official – they will do their due dilligence to satisfy themselves that the victim culture has ended in the Costa del Sol.

Why the Spanish property bubble burst

As the dust settles on the mired property markets of Europe people are beginning to question how and why such a seemingly strong investment proved to be disastrous for many investors and families.

In Spain, the reason for the Sunshine State’s property bubble and its subsequent collapse, are being discussed and the answers provided make a lot of sense and carry warnings about the future behaviour of Governments, banks, developers and property professionals.

The conclusion so far from various debates by academics and industry insiders seems to suggest the Spanish economic miracle was a mirage, because the country was dedicated to building homes that people would not have wanted to buy had they known how little they would be worth in the future.

A house is only valuable as something in which to live. And if no one wants to do so, then it is not worth anything. Spanish, British and other north Europeans have purchased flats under construction or which will be visited only a few days a year, not because buyers were eager to consume housing, but because they thought they were a store of value for the future.

Furthermore, many banks and building societies provided big loans to developers and builders, many of whom cannot repay the loans and if they are allowed to go bust, could lead to bankruptcy for banks and cajas (building societies). Municipalities have enjoyed unsustainable revenues due to land reclassification and the waste to which they have become accustomed is over.

Cars and other consumer items that households bought during the property boom years were mistakes as they could not afford to buy because they were not as rich they thought. This led a complete distortion of the fabric of the Spanish economy.

Finally, as this kind of unsustainable activity has stopped, the economy has entered recession, although there are now a lot of well-priced bargain homes from Spanish banks and anxious, must sell owners.

Why did two successive Spanish governments and the Central Bank of Spain, despite numerous warnings on over-priced housing, not attempt to stop the bubble?

First, because the construction sector is labour intensive, which is important in a country with a high unemployment rate. Secondly, because an increase in the value of housing benefits the average voter, who is the owner of his home. And thirdly, because the real estate sector generates substantial revenue for the public sector at national, regional and municipal levels.

For example, in 2004, it accounted for 60% of the budget (excluding liabilities and current transfers) of Valencia and 50% of Madrid.

Lessons for the future? The best counter measure for house price inflation has got to be accurate price monitoring and production of benchmark prices at every level of the market. The Spanish Ministry of Housing has not been a reliable, accurate source and the replacement source, the National Institute of Statistics not much better.

Recently, the property registries themselves have been publishing the notarised transactions and the figures from TINSA, the big valuations company have been accurate and true reflection of prices gained from the frontline by their 3,000 frontline valuers.

There has to be increased planning credibility to avoid the disasters of the Valencia Land Grab and homes bought in in good faith being threatened with demolition because in retrospect the “planning permissions” granted by dodgy local mayors were more about revenue than community.

And Brit buyers should commit to a property in Spain only if they want a holiday home at a realistic price and to have lots of family fun and cool-out time while seeing an investment return over a number of years.

Now would seem an ideal time to grab a bargain, enjoy the fulltime or holiday lifestyle that comes with it and spend years immersed in the sunshine and culture of Spain...

Spain moves could aid crashed Brits

Brits are biting the bullet every day as the media reveal more bungling of the ruling McBroons and their cosy cohorts in the banking business.

Having forced Lloyds Bank into a shotgun marriage with busted HBOS, McBroon preened how single-handedly he’d saved British banking and trotted off to meet the more sensible leaders of other countries to “lead the world out of recession”.

He never paused to get the Bank of England, his beloved and disgraced Financial Services Authority (FSA) nor his army of foolish fiscal mandarins to check the balance sheet of beggarly HBOS. Nor did Lloyds do much checking, in their haste to grab the McBroon billions in bribes if they saved his skin.

Ten billion quid is a lot of money and that’s what Lloyds will have to write off having found toxic assets in HBOS. It was comeuppance week for the British bankers when they trotted along to Westminster to say sorry for fouling up the world economy and wrecking the lives of millions.

They said it wasn’t their fault though…implying that that the FSA, operating the light touch” governance of McBroon for a decade or so, had not rapped their knuckles or threatened to downgrade the chateau wine at their next cosy luncheon..

So where to now for cash-strapped Brits, whose property assets and pensions are worth a third less than they thought and the markets that govern the prices are in total disarray and unlikely to show any growth for years to come, according to some pundits.

Think Spain, where the banks were banned from getting involved with American trailer trash mortgages, are still reporting good profits and have plenty of cash waiting for mortgage applicants. They also have the best interest rates for savers with one deal from La Caixa at 6% on 12 month call, being over-subscribed by a long way.

The Spanish banks also have a growing supply of repossession homes at up to 50% below current valuation and they can be purchased from specialist broker http://www.propertyinspain.net/ often with low cost subrogated mortgages built-in.

It’s an obvious way out of the crazy world of the McBroons, who seem to turn everything they touch into a solidifying rock bottom of common sense and diligence.

It seems few of the McBroons have actually run anything remotely commercial in their lives. If UK PLC was a commercial undertaking it would be going bust about this time and the McBroons would be collecting their redundancy payments and handing back the keys to the limo.

Spanish property winter warmers

While Britain feels the chill in every sector, including the weather that has knocked more billions out of the economy, Spain is now being widely seen as the best place for bargain properties among hard-pressed Brits.

With uncertain futures thanks to the McBroons blunders and little sign of recovery, many UK residents plan to vote with their feet and many of them before the next general election that might finally sweep away the McBroon legacy.

The Spanish economy is regarded by commentators as in a better state than that of the UK, the weather offers 300 days of sunshine every year and property bargains are up to 50 percent down on the peak and now at the level of 2003. Even factoring in the sterling exchange losses, that’s still enough of a bargain to go for.

Having a property asset in the world’s strongest currency can be beneficial and for savers being offered a paltry 0.75% by some UK savings organisations, the thought of a juicy 6 percent interest from stronger Spanish banks is already tempting some Brits. The first of these deals, from La Caixa, is about to become over subscribed.

Brit and other north European property buyers are doing their research carefully on the specialist online sources of Spanish bank repossessions and must sell property in Spain and cannot quite believe they can buy a modern apartment within walking distance of the sea for EUR 35,000 and have a panoramic view of the sparkling Med if they opt for another bargain at EUR 55,000.

Three bedroom villas with swimming pools on golf resorts start at EUR 190,000 as hard-pressed owners and developers join the dash for cash.

These are many other bargains can be found at the highly rated website http://www.propertyinspain.net/ where buyers are provided with honest answers and immediate access to Spanish partner banks willing and able to provide generous mortgages to Brits with an eye for these Spanish property winter warmers…

Spanish enjoy Mañana Moment in financial storm

As America and Britain struggle to solve their banking greed-induced financial woes, Spain’s Government, having dropped a EUR 3 billion life-raft to the property sector, is taking a quiet “mañana” moment - because the country’s banks have zero exposure to US subprime debt…

The Bank of Spain has long banned risky stuff for the banks under its control and their reserves and bad debt provision would have to plunge by 50 percent before they felt any stress. If the current level of loan defaults increases and the world banking paralysis continues, then Spain, like the rest of the western world could be in deep trouble. However, at the moment the country is better placed than Britain or America.

Spain needs foreign cash to service a current account gap of EUR 100 billion, on the same levels as the US and Britain. Much of that is tied up in the one-time property boom that has seen many developers crash, leaving surplus stock to be sold off on the cheap. Spanish banks too, are drip-dripping repossessions into the market as can be seen daily on the www.PropertyInSpain.Net website.

There are bargains to be had in most second home areas of Spain and prices have generally dropped below the benchmark EUR 2,000 a square metre level that means a typical 2-bed, 2-bath apartment with communal pool can be picked up for around EUR 124,000 – well within the £100,000 sterling buying band.

The other big earner for Spain is its world-class tourism industry, which generates huge revenues and maintains millions of jobs. Tourist arrivals this summer have held up well, despite higher flights costs, lower disposable income and the strength of the Euro as northern European and Spanish families insist on their annual breaks on the playa. As many families prefer rental apartments or villas to hotels, the property rental market is also holding up.

So it could be the Spanish Government can continue to take a relaxed mañana moment as less well managed economies continue to battle it out.