RECESSION

AND

THE SPANISH PROPERTY CRASH

We are, of course, in a property crash – the consequences of which are likely to last for some years.  As always, in a property crash, everyone will be affected whether they are promoters, property developers or businessman in unrelated industries.  Cafes will sell less almuerzos, restaurants less food, papers less advertising and shops less goods.  Property is at the core of personal wealth and the next few years will be a strain for each and every one of us.

It is vital that everything possible is done to alleviate the Spanish property crash, which has been due to a range of factors from massive over building, a misunderstanding of what the market wants and the world credit crunch – to mention just a few of the problems.

However, a major problem that seems to have escaped most Valencians is the utter fear that north Europeans now have of buying property in Spain, and particularly Valencia.  Week after week the press in north Europe have had programmes on radio and television and articles in the press criticising the abuses that have occurred under the LRAU (or ‘Land Grab’ law, as it is universally known in the UK).  The perception in the UK, for example, is that it is simply not safe to buy a property in Spain.

To some extent I agree.  And I am in the business.

The truth, however unpalatable, is that a foreigner coming to Spain is at real risk of losing some, or all, of his life savings when he buys a property here.  Indeed, no Spaniard I have met would ever consider buying a property in England, if he thought, for one moment, that what happens here would occur in the UK.

We all know the problems: illegal building, often defective construction, utterly dishonest agents charging outrageous commissions, Ayuntamientos who are rarely transparent, collusion between incompetent lawyers and accompanying agents and promoters and dubious Notaires.  Heaven forbid that a Spanish property owner suffers urbanisation, when he will experience an extortionate and disgraceful incompetence that simply defies belief (Marxuquera currently provides a prime example).

The foreign property market has been the driving force behind the Spanish property boom.  It has provided enormous wealth to the country and its peoples but has been treated with utter contempt and unforgiveable arrogance.  It is vitally important and must be seduced back to Spain.  Foreign buyers must have their faith in the safety of buying in here restored.

In Northern Europe buyers and sellers always use lawyers and Notaires to ensure that the property they buy is safe - so that they know exactly what they are buying and the implications thereof.  Here, to rely upon a conveyancing lawyer (the ultimate protection in Northern Europe) is often laughable and made more risible by a supine College of Lawyers clearly unprepared to discipline negligent conduct.

Spain needs to place conveyancing lawyers under stringent controls to ensure that they do their work professionally and to the highest integrity - without fear or favour.  To back this up, Notaires should be placed under a strict duty to ensure that any buyer (particularly foreigners) clearly knows and understands the implications of what he is buying – whether it is properly legal, urbano, rustico, fully urbanised or could be urbanised.

Finally, unfortunately (as it will reward illegal conduct), a law creating an amnesty for illegally built properties in Spain needs to be swiftly passed – with any property built illegally thereafter demolished immediately.

Whilst these changes may not change the affects of the credit crunch or the overbuilding that has occurred, they will alter the perception of Spain to potential foreign property buyers.  And, for sure, the country needs every help it can get to mitigate the recession and prevent the Spanish property market from going into freefall.

Copyright Nick Snelling (www.nicholassnelling.com) author of three books on Spain including ‘How to Move Safely to Spain’ (www.movesafelytospain.com)