EU Property Solutions- Experts in all Spanish property issues

As we all know the property market ended its peak in 2007.

From 1996 to 2007, Spain’s national average house price rose by a whopping 197%. During this time thousands of foreign investors wanted a piece of the pie and were lured by interest free mortgages and rental guarantees.

It seemed a no brainer at the time as repayments were extremely low and affordable for a fixed 10-year time frame. In the UK, Halifax were the main protagonists of these mortgages and a mixture of slack lending and possibly mis-selling encouraged large volumes of UK and Irish to buy abroad, some taking equity out of their own home to purchase the dream home in Spain to retire in.

We are now in a period where borrowers who were on the ten-year interest only mortgages are seeing the end of this period. Capital Repayments spike and we have seen monthly payments double in some instances.

With increased monthly payments coupled with IBI Tax Payments and Community Fees many of these holiday investments start to cost too much a become a loss maker. Furthermore, with a rapid decline in values since 2008 many of these borrowers find themselves in Negative Equity. In most Spanish cases we can surrender the property to the lender and achieve a complete debt write off.