EU Property Solutions- Experts in all Spanish property issues

During the property boom in Spain, there was a massive spike in building and lending activity. Numerous large developments were built with the foreign investor as the prime target audience. Some of the key names in the property development world at the time included Polaris world, Oceanview, and MRI.

Bought the ‘dream’…

Areas in coastal regions such as Costa Del Sol & Costa Blanca were of key interest to the overseas property buyers. They were seeking the picturesque, tranquil, holiday location that the brochure sold.  Property developers were selling ‘dreams’ to foreign investors and many UK and Irish customers were sold on this ‘dream’. A luxurious golf and country club or the desire for a property overlooking the sea.

According to the reports of the Bank of Spain; from 2000 to 2009, 5 million new housing units had been added to the existing stock of 20 million. Some of the areas which we know were affected specifically, include; Roda Golf, Manilva Hills, Corvera, Torrevieja, Estepona and Los Alcazares.

During this time, it was presumed that buying property in Spain was as ‘safe as houses’, pardon the pun.  Banks were far too willing to lend money and coupled with a corrupt planning regime; this resulted in a toxic concoction that was only ever going to end one way.

Living the nightmare…

After the property bubble burst prices started to fall. Buyers became less and less eager and developers, starved of loans by Spanish banks going bust.

In the lucrative areas where the ‘dreams’ were sold, particularly the coastal regions of the Costas; there are unfinished developments without water and electricity, and without any prospect of being sold. For those that were finished, people are left with a property that they no longer want, that is in a deserted and run-down development. The dream is now a reality, a harsh and very different one than what was sold.

Many re-mortgaged their own homes in the UK to raise equity. This has put their own homes at risk at a time of life where most would want to be retiring and enjoying life.

Speak to the experts in foreign property debt!

We recently hosted a webinar back in July in respect of Interest-Only mortgages. We have had quite a bit of interest in this very niche subject, especially as it is becoming more and more relevant as time goes on.

We have seen and helped hundreds of clients who had taken out Interest-Only loans who are now paying the hefty price.

This type of mis-sold mortgage issue is something that we’re seeing with our borrowers. They come to us after realising their 15-year Interest-Only period is coming to an end. We had a recent client who found out that his monthly repayments would go from €250pm to €2,150pm; an extremely high spike in payments that would very quickly become unfeasible. One that brought it to a head was literally a ten-fold increase in the requirement for the monthly payments.

When it comes to loan sales, they are very often sold to vulture funds. They are different animals completely and these situations are becoming more prevalent. Last month a Spanish bank even sold a performing loan book. Everything was up to speed and good, but they still sold it on so be careful of that backdrop.

Undoubtedly many people were mis-sold properties however, they will not win that argument or that war. There is one bank in Spain that has sold a lot of these Interest-Only mortgages but there are other banks involved too. If people, try to do direct approaches respectfully we suggest don’t. In this webinar, Terry goes through why you shouldn’t do that and how we can attack the problem.