Remortgaging and refinancing in Spain

The Bank of England has surprisingly kept interest rates low at 0.1%, despite blatantly obvious inflation (average UK house price hits record £270,027). The effect on the GBP has been negative, reducing purchasing power both in the UK and in exchange rates with other currencies. To add insult to injury, Andrew Bailey, the Bank of England governor has said "I'm very sorry that's happening [the 5% rise in cost of living]". I will allow readers to form their own opinions about banking officials in general, mine was formed already back in 2008 :-) In any case, one wonders what the effects of this would be on Spanish properties. The Spanish market has been relatively boyant and the number of sales on the rise. It remains to be seen whether the loss of foreign-exchange power is higher than the fact there is ample liquidity at low mortgage rates for enabling buying a property abroad. I personally would expect a negative impact on prices for luxury villas like these, especially in high-end markets like Marbella, however this may be a good thing - buyers might grab this opportunity to buy now because again, in the BOE's own words "higher rates are coming by April". As always, I take banker's words with a ton of salt, because we must always watch what they do, not what they say. However, they might indeed not have a choice given inflationary pressures, so perhaps this is really the last chance to buy with low interest rates for a while. 

Something to watch closely...