Olive Press Property Magazine - Issue 34

Property

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www.theolivepress.es

Issue 34

chalk & cheese

October 2019

Two historic homes, two opposite styles SEE PAGES VIII & XII

Dilemmas of a billionaire

10

Spanish properties perfect for the mega-rich SEE PAGE IV

More with a mortgage

B

UYING a property is cheaper than renting in most parts of Spain, according to new calculations.

In 15 major cities it is far cheaper to pay a mortgage than to pay a landlord rent, it has been discovered.

According to the findings, in none of the major cities did the cost of a mortgage come above 31% of the average family earnings.

In some cities, such as Merida, the price of renting is as low as 8% of the average salary, found the report by global estate agency Century 21.

In Sevilla, the cost of buying with a mortgage came to just 19% of the average salary, which is €2,671 a month, while in Valencia it was just 16% of €2,776.

Rental outlay in the same two cities, meanwhile came to 32% and 26% of monthly earnings.

In Murcia - where the average salary is €2,683 a month - tenants are paying 20% on rent, while owners pay just 11% on a mortgage.

Another example showed that the owners of a 90-square-metre apartment in Madrid pay a mortgage of €960 per month, while tenants are paying €1,419 per month, an alarming 40% of a family’s income.

Those looking to live in Spain are better off buying than renting longterm, new figures show Only Barcelona cost more to rent at 44% of average earnings, while Palma in Mallorca cost 34%.

“Renting has become a necessity for many people who can’t afford to buy.” explained CEO of Century 21 for Spain and Portugal, Ricardo Sousa.

"Today, major cities around the world face the challenge of providing affordable and adequate solutions.

“This is especially the case in large cities such as Madrid and Barcelona, ​​where there is strong population growth, while housing options with affordable prices are scarce.”

The cost of rents in Spain have jumped by 50% over the last five years, according to a study by the Bank of Spain, using data collected by Idealista.

Almost 23% of the population rent property, significantly less than the European average of 30%.

DIVIDE: Between average regional earnings and the cost of rent and a morgage

II

PROPERTY

On the slide October 2019

Mark Stucklin

www.spanishpropertyinsight.com

The property market is in the biggest decline since 2013, but things should turn around by Christmas, writes Mark Stucklin

S

PANISH home sales data for August 2019 reveal a market on the slide with transactions on the decline in almost all areas of interest to foreign investors, though there are reasons to think the setback might not last.

Whichever figures you look at, the number of home sales recorded in August were lower than the same month last year.

There are two main sources of home sales figures in Spain; on the one hand, the National Institute of Statistics (INE) based on source data from the Association of Spanish Land Registrars, and on the other, the Spanish Notaries’ Association.

The data from the INE is based on the number of deeds of sale inscribed in the Land Register each month.

Inscription can take place weeks or even months after the sale, so these figures lag the market by a month or two.

The data from the notaries is based on the number of sales completions they witness each month.

Their figures are more timely but subject to significant revision in the months that follow.

According to the notaries there were

30,351 Spanish home sales in August, a decline of 4.5% compared to the same time last year.

Home sales have declined for four consecutive months, and in five of the last six months, according to the notaries.

You have to go back to the 2013 when the market was just starting to turn around after the real estate crash to find declines as big as this.

And this is the first time since 2012 that we see four consecutive months of declines in sales. There’s little reason to fear another crash today because the circumstances are so different (for example the total lack of a credit bubble and new construction still down 90% compared to what it was), but it is certainly starting to look as if the wind has gone out of the market’s sails, at least for now.

That has implications for buyers, vendors, and property professionals, who might want to adjust their expectations accordingly.

The number of Spanish home sales inscribed in Spain’s Land Register in August for sales completed in the proceedings months was 32,329 excluding VPO subsidised housing sales, down 20% in a year (-21% if

you include VPO sales).

That’s the second decline in the last three months and the trend is clearly down.

As these figures lag the market by a (-40%), and even the perennially pofew months, this big decline was to pular Costa del Sol (Malaga province) be expected given the 21% decline down 30%. we saw in the notaries’ figures in Only the small market of Almeria June managed to clock up a positive numWith the notaries’ figures in hand, ber of just 3%. we can expect another double di- Year to date the picture is less negit decline in the INE’s figures next gative with some big markets like month.

Catalunya still up on The INE figures also last year, but the key give us a breakdown Experts blame a markets of Alicante of sales by type of (Costa Blanca), Maproperty (new / resale) Spanish mortgage laga (Costa del Sol), and by region. and the Balearic and law introduced There were 6,426 new Canary islands are sales and 28,945 rein June for all smaller in the first sales recorded in the months of this disrupting sales eight month, both including year than they were VPO, and both down in 2018.

21%.

Experts blame a new Although the new figures don’t in- Spanish mortgage law introduced in clude off-plan sales they don’t bode June for disrupting sales before and well for developers if they point after that, which can clearly be seen towards a trend. in the notaries’ figures and is now The regional picture was one of wi- showing up in the INE figures. despread declines in all areas of most From the notaries figures it looks like interest to foreign buyers, with the the declines are getting smaller (June Canary Islands taking the biggest hit -21%, July -17%, August -4%) and

we may even see a return to growth in September if the trend continues.

But experts also warn that the current political instability in Spain, with elections due in November, and the Catalan independence drive hanging over them, is undermining the confidence of potential buyers, who could be forgiven for adopting a wait-andsee approach.

To which I would add foreign demand appears to be cooling fast thanks to high transactions costs, unattractive tax laws, and the lack of transparency and professionalism in the Spanish property market all taking their toll on foreign demand now that prices are not so attractive.

I don’t expect another crash but it looks like headwinds are playing a bigger role in the market than before, and could set the agenda for the next few months.

That said, all experts quoted in the Spanish press forecast a return to moderate growth in sales during the last quarter of the year. www.spanishpropertyinsight.com

3 III

October 2019

Fast track

TOOLS DOWN

NEARLY two dozen estate agents have taken part in an organised cleanup at Fuengirola beach. The employees of Swedish agency Fastighetsbyran, which has several branches on the coast, helped make the beach a tidier spot. The team mucked in and disposed of used cans, cigarette butts and plastic. The day was part of Fastighetsbyran’s new green initiative, with many more projects to come in the future.

THE number of people employed in the Spanish building industry still remains under half pre-financial crisis levels, new figures have shown. Just 1.28 million people were employed in the construction trade during the second quarter of 2019, compared to 2.68 million people in 2008, before the global crash. Andalucia employs around 213,000 people in the building trade, more than any other region in Spain. However, this is still less than half the 441,300 people in the region working in the trade before the crash.

Brit couple see light at the end of the tunnel in illegal homes saga A PAIR of British pensioners stranded in Spain for 16 years after buying an illegal house can finally move home.

Rodney, 76, and Beryl Webster, 77, bought their €176,000 Andalucian villa from a crooked estate agent who failed to tell them it was built illegally, effectively making it worth nothing.

They and an estimated 40,000 other British property owners have now won a battle for their houses to be

Home at last

By Robert Firth

recognised, after a new Andalucian regional government passed a law granting legal status to 327,000 illegally built homes.

“It means we can finally go home to Britain,” Mrs Webster, 77, said.

“Without the house being legal we could not sell it. We have been stuck here for so long, we felt like hostages.”

Maura Hillen from cam-

paign group AUAN, which has pressed the Andalucian authorities on the issue, said: “It has been a long road. We were lucky that a change in government took us over the finish line.”

Problem Gerardo Vazquez, a lawyer who has been helping affected British owners for 15 years, said the problem had blighted people’s lives for years.

“Many people did not have

basic services such as water and electricity. They were basically ignored as this was a problem the authorities

Palatial buy

TWO iconic Malaga buildings are being put up for auction.

The well known Correos building next to the river, a structure valued at €16.8m, will go to auction in December (right).

Currently the home of various Junta departments, as well as the tax authorities (hacienda), the new buyer will have to at least partly use it for public services.

The second building, the Palacio de la Tina (left), a complex also known as the Palace of Ink, is valued at €12.45 million.

It is currently being used by the Junta.

thought was too big to deal with.”

See Leaving the Third World, page XVI

Cranes back AROUND 10% more building licences have been passed this year in Malaga.

So far 5,850 new homes have been approved in the province, which is reflected in a sharp increase in cranes towering over the coast.

Casting call

HIT Channel 4 show Sun, Sea and Selling Houses has returned to Spain scouting for a new cast of home buyers.

The programme follows British estate agents hoping to find UK expats their dream home in the sun.

If you are currently house hunting in Almeria or Alicante then producers at Ricochet are waiting for your call.

“We’re looking for people house hunting in November and December,” a spokesperson told the Olive Press.

“Whether their budget is €50,000 or €5 million, or the house is a holiday home or a permanent one, we would love to hear from them.

“It’s a really lighthearted, fun show.”

Those interested should email spain@ricochet.co.uk or call 00 44 1273032190

PROPERTY

IV

October 2019

Concrete retreat in Madrid €21 million Home to Spain’s elite, including footballers Raul, Ronaldo and Gareth Bale, La Finca is reputed to be Spain’s safest neighbourhood as well as a showpiece for grand architectural design, like this magnificent minimalist masterpiece. Incorporating ultramodern design principles and luxury finishes to create a splendid family home, the outdoor pool mimics the alluring curves of the sculpturesque villa itself. If you’ve plenty in the bank you’ll be in good company as La Finca pays its taxes to Pozuelo de Alarcón, the municipality with the highest per capita income in the country.

(Jaime Valcarce)

Contemporary palace in Marbella €23 million Set in the hills above Marbella, its infinity pool cascading over a sheer drop, this palatial villa is made for high flying hedonists who like to live life on the edge. Set over four levels, it shimmers with gold and silver interiors, its walls and fireplaces resplendent with opulent marble. A breathtaking glass ceiling allows views onto the first floor from the terrace in a dizzying display of contemporary one-upmanship.

(Mas Property Marbella)

Mansion shopping As a €30-million plus home goes on sale in Marbella, take our Top 10 tour of the most eyewateringly expensive properties in Spain

ONE of Spain’s most extravagant modern mansions recently went up for sale in Marbella’s exclusive La Zagaleta urbanisation and it will cost you a cool €32 million.

The ostentatious Villa Cullinan boasts its own Turkish bath and spa complex, two swimming pools and no less than 14 bathrooms… oh, and two bronze Salvador Dali sculptures.

This is, after all, Spain’s most upscale urbanisation - countingHugh Grant and President Putin as neighbours - so it’s never going to be cheap.

But assuming you’ve got silly money to spend in Spain this year, check out our hotlist of 10 incredibly pricey properties to whet your appetite. We’re talking homes with more bedrooms than the average hotel, gardens the size of a small country and a cheque that requires eight figures and six noughts!

Country castle near Madrid €15 million Over 800 years of history are ingrained in this former Franciscan monastery, but there’s nothing medieval about the 22 ravishing rooms enclosed within its ancient walls. With eight acres of gardens to get lost in and its own lake - the perfect spot to break out the Fortnum and Masons picnic hamper - bucolic bliss doesn’t get better than this.

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October 2019

Classic chateau in Marbella €32 million If this tres chic take on a traditional French chateau reminds you of a mini Fontainebleu you’re not wrong. The regal mansion is fronted by three acres of formal gardens - you could be in Paris but this is Marbella’s prestigious Golden Mile, a gemstone’s throw from the bright lights of Puerto Banus. The analogy continues inside where Versailles meets Versace with stylish chequerboard marble floors and gleaming glass chandeliers. If that sounds too grand you can always slum it in the separate four bedroom villa which is part and parcel of this elegant estate.

(Key Real Estate)

Clifftop eyrie in Alicante €35 million For people in the public eye, this remote coastal retreat offers the perfect cover. Set high on the cliffs concealed by a buffer zone of wraparound pine forests, the unparalleled views over the Med along the Costa Brava coastline belong exclusively to the owners. With no near neighbours they can skinnydip in the clifftop swimming pool and jacuzzi or nip down stone steps for a dip in the sea. It’s also the perfect party palace with no one around to tell on you for getting too rowdy. (Kalliste Properties)

V

17th century manor house in Mallorca €27 million Elegant and imposing, picture 300 rugby pitches and you’ll get an idea of the scale of this grand estate which dominates the valley encircling the picturesque village of Valldemossa. With atmospheric beamed ceilings and richly decorated in baroque-inspired furnishings, the only snag is you’ll need an army of chambermaids to make up the 80 bedrooms - and by the way, 10 of them come with their own jacuzzi en suite.

(Key Real Estates)

Rural estate in Sevilla €25 million Sprawling across 5.3km square of rolling green countryside - an area almost the size of the Rock of Gibraltar - keeping this authentic hacienda’s gardens in trim is no walk in the park. Built for bon viveurs with its own restaurant and verandah dining terrace, a fully equipped gym and spa. A tower suite with 270 degree views of the Andalucian countryside delivers additional bang for your bucks.

(Villas & Fincas) Continues on P VI

VI

October 2019 From Page V

PROPERTY

Mansion shopping (cont.)

Countryside estate in Mallorca €26.5 million This rustic country manor and guest house nestled in the picturesque village of Puigpunyent in Mallorca comes with its own billiard room, library and chapel. Perfect for hosting, guests can enjoy making use of the tennis courts and even bring a horse along to stay in the adjoining stables if they wish.

(Sotheby’s)

OH and that’s a lot for a cave

Historic cave in Madrid €1.95 million Set over two floors in Madrid’s historic centre, stepping down into this semi-underground cavern is like a descent into different ages. The second floor, made from glass, provides a contemporary streamlined contrast to this stone walled pocket of the past.

Designer villa in Mallorca €15 million A contemporary new-build with sensational sea views, this luxury detached house comes with an exclusive Port d’Andratx postcode. Blending cutting edge design and bayside bliss, when you tire of splashing around in its network of turquoise lagoon pools, there’s direct access to the ocean from rocks in front of the house.

(Sotheby’s)

PROPERTY

VIII

October 2019

PROPERTY

BLACK & WHITE JON CLARKE is wowed by the sumptuous styles of brand new Costa de la Luz suites hotel Plaza 18 IT has the sort of hip, high-end charm one would normally associate with a capital city.

Yet, Plaza 18 sits in the heart of the Cadiz town of Vejer de la Frontera, best known for its cutting edge cuisine and magical light.

A collaboration between the town’s emblematic Califa hotel and award-winning London interior architect Nicky Dobree, it combines modern, contemporary style with the careful conserva-

DESIGNER: Dobree

tion of a 19th century townhouse.

In short, luxury has finally arrived on the Costa de la Luz. While there are many stylish and comfortable places to stay on this rugged, lesser-known Andalucian costa, few comprise the sheer opulence of Plaza 18.

This is, of course, appropriate for the 1896 gem, that was built on foundations dating back to the days of 13th century Al-Andaluz.

Working with local craftsmen and using entirely organic building materials, Dobree has ensured it has a harmonious connection to the region.

This meant lifting and relaying the original black and white floor tiles, while the massive glazed roof lantern (or ‘montera’) was carefully dismantled and repaired.

It ensures a wonderful sense of light in the main atrium, where a stone staircase and wrought-iron balustrade ri-

ses up magisterially on two sides to the handful of suites upstairs.

There are only six suites in total, each with their own distinct style and measurements.

What unites them are the full-height black lacquered doors with quirky circular brass handles, designed by Dobree herself.

Each bedroom is the very epitome of comfort, well-appointed, with amazingly deep mattresses and pillows to sink a battleship, while the bathrooms are luxuriously curated and have their own evocative scent.

A communal lounge features a series of paintings bought by Dobree over the last few decades and a welcoming honesty-style drinks tray, plus a large selection of teas and coffees.

Meanwhile a terrace out back is the perfect place for guests to enjoy breakfast served on hand-painted plates with views over the classic Cadiz town and over towards Morocco.

Best of all though, is the side door taking you straight into Califa hotel, and its ground-breaking courtyard restaurant, consistently voted one of the best on the coast. www.hotelplaza18.com

26

AGONY Property ANT

September 25th - October 8, 2019

YOUR LEGAL PROBLEMS ADDRESSED BY ANTONIO FLORES

Loopy laws

Antonio Flores shines a light on a few of the 100,000 laws in Spain ACCORDING to the CEOE (Spanish Confederation of Employers’ Organizations), there are in Spain approximately 100,000 laws and regulations of all kinds, of which almost 67,000 are regional.

This legislative hemorrhage, far from receding, is on the increase.

Luckily, in our day-to-day business we will be actively interacting with just a handful, albeit the most important ones (Civil and Criminal, Road Safety and Horizontal Property Acts, to mention a few).

Still, there are laws that one might find interesting even if they don’t relate to everyone.

Let’s look at a few: License of Occupation a condition of Rental License Many properties in this county do not have this license, for a variety of reasons, and regulations vary across Spain.

In Andalucia, the Decree 28/2016 refers to having the LFO or an ‘equivalent document’.

In Marbella, thousands of illegal properties are being rented with the notorious ‘certificate of non-infraction’, apparently without issues.

Other town halls issue ad hoc certifications to comply with regional legislation.

Legality of cannabis products in Spain Trading with cannabis is not legal in Spain.

At the most, you will be allowed to grow the plant for your personal use, and consumption needs to be restricted to the privacy of a home. Cannabidiol, which is a derivative and not classed as a drug is legal; however, it can only be marketed for external use (cosmetics).

Duration of lift maintenance contracts The Supreme Court has recently ruled that where the owners of lifts are consumers (private individuals or Homeowners Association), the maximum duration of these will be of three years. This limitation will allow those consumers to change suppliers and benefit from free competition.

Cancellation of flights and compensation in the wake of the Barcelona riots According to Regulation (EC) No 261/2004 of the European Parliament, a carrier’s liability can be limited or excluded in cases where an event has been caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken.

This includes political instability which, unfortunately, is the case in Catalunya at present.

Squatters rights in Spain Squatters have no rights in Spain other than the right to a fair trial where - sooner or later - the Judge will order their eviction.

The Senate recently approved a fast track procedure to have squatters evicted within days (inefficient service of process and other Court delays excluded).

Child Custody after Divorce There isn’t a specific law as to which parent should be awarded custody, other than by what’s best for the children.

Currently, Courts award both parents shared custody in 30% of the cases, 65% to the mother and 5% to the father.

Email Antonio at aflores@lawbird.com

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PROPERTY

Cabin fever

XI

October 2019

If you’ve never kipped in a treehouse before it’s time you branched out!

IT’S quite possible the most eco-friendly retreat imaginable.

The ‘Pinea’ camping suite, by ERA Architects, has brought together the best elements of camping to create a treehouse which merges effortlessly into its natural surroundings in Barcelona’s forest fringe.

The arboreal accommodation doesn’t even penetrate the earth, being held down with hidden weights in its layer of astroturf.

The interior of the ‘tent’ is minimally constructed with a wood base, cork enclosure, and fabric facade.

The off-grid cabin is powered by small solar panels lining the roof. Interiors are lit by small reading lamps each containing a battery to charge a phone.

Below, campers will find a wooden picnic area, sheltered from the elements, including a table and chairs - treehugger heaven!

PROPERTY

28 XII

Portals to progress

October 2019

In the penultimate part of a series on the renovation of an ancient townhouse in Ronda, Gabriella Chidgey reveals how to work with windows, doors and town hall rules There were only two glass windows in the whole 350-metre squared building.

Other than these 1980s additions there were just metal shutters which banged noisily in the strong winter winds.

It being an 18th century townhouse in the casco historico of Andalucia’s most romantic town, the facade was completely protected so the sizes of the windows and doors needed to remain exactly the same.

Worse, the council decreed the windows must be wooden, or at least appear to be made from wood, and they must be within the natural range of wood colours.

It turns out there is an aluminium window that imitates wood grain, and both the builder and the architect suggested it as it is both practical and economical and they knew we were on a budget.

But it made my husband and I cringe.

It is true that wood is expensive and it warps in the extreme Ronda climate, but I love its warmth and I eschew imitation so pine windows and shutters were dutifully ordered from a local factory, then painted and fitted by a carpenter.

Beware, for this takes at least

a month to arrive (in our case much longer) but they meet EU regulations meaning the seals and double glazing meet the standards required to guarantee maximum energy efficiency.

With the panes, form follows function so I opted for contemporary simplicity and found an ebony matt varnish to stain them the darkest brown allowed.

The original window bars or rejas - were already painted black so they toned well.

On the back of the house we were not constrained by size or the colour code so we mixed white with a transparent matt varnish so that the natural grain was visible.

The main entrance doors and a second set, just inside a traditional ‘San Juan porch’,

NO WASTAGE: The original front door and its foot-long key was painted matt brown while a set of old doors were used to make a wardrobe

DON’T TOUCH: The conservation of Ronda Romantica apartments was by order

were hundreds of years old complete with studs, iron bolts, a hand-wrought light arch (see above) and an ancient lock with a key. And I’m not joking - about a foot long.

There were so many layers of mucky brown paint that had we attempted to strip them I doubt we would have been left with any doors at all.

Instead, we just painted over

everything with, yes, you guessed it, the blackest, matt brown paint I could find, using the Farrow and Ball colour Tanners Brown as a guide.

The original doors inside the house were old, rustic and uneven, however they still worked, or would, with a little care and repair. Some stayed in position, others found new thresholds, and a couple became doors for a new wardrobe.

Most were repainted in a matt version of the original yellow ochre, copied by a local paint shop from a fragment. I prefer harmony to contrast so I differentia-

ted the new from the old by years to get this far) I used painting the doors a stronger the builders before they left mustard shade. the site.

My plan had been for the They used thin bricks (racarpenter to sillones) covebuild the kitred with cechens for each ment (mescla) None of the apartment, and to create the appliances, in structure and use a local white marble for for any of the five divisions the surface. the fridge and Since the builwashing maapartments, ders were finichines, etc, and fitted shing and the the counter top windows still was made with in the carpenthe remainder ter's workshop, it seemed of the floor tiles used in each prudent to choose another apartment. course.

In three apartments we laid With speed being of the es- reclaimed baldosas hidraulisence (it already taking two cas (encaustic cement tiles), in one old barro tiles, and in the more modern flat, new terrazzo tiles which looked great when paired with a black tap. But typically job done, builders off, we found that none of the appliances, in any of the five apartments, fitted underneath. Although built to a standard height, we had forgotten that the width of a brick was 10cm in comparison to a couple of centimetres of marble. I should have drawn a proper plan, as I had for everything else, and I should also have created one kitchen first to alert me to any problems.

Luckily, we managed to sort it out by shaving away a few cm in some places and removing the top and the feet of the washing machines.

Badda boom, everything now fits perfectly and with the lovely hand-made curtains from a local lady it looks like it was planned this way in the first place.

Next month I’ll take you through my choice of furnishings.

Visit www.alcantarilla.co.uk to stay at Ronda Romantica or call 00 34 654152122 to speak to Gabriella

PROPERTY

III

September 25th - October 8, 2019

XIV

October 2019

PROPERTY

for gorgeous G HEDONISM AND PLEASURE: The two key factors desired at Madrid home

A PENTHOUSE apartment in Madrid has been turning heads for its incredible use of space.

The G House, completed this month, was renovated by Gon Architects for a wealthy client who asked for the home to represent two things; hedonism and pleasure.

The penthouse is spread over 121.5m2 but its minimal partitions and use of natural light make it seem much larger.

The whole space is open plan, divided only by a central core which holds storage space and a bathroom.

On one side of the central core sits the master bedroom and study space, which opens out to a private terrace.

On the other side you’ll find the kitchen, dining and living area, making up the social aspect of the apartment. This also opens up onto a terrace, perfect for hosting guests.

The home also boasts quirky design features like the small pool and an expansive bookshelf.

PROPERTY

XVI 32

October 2019

After new regulations come in, illegal property expert Maura Hillen, MBE, explains what the legislation means for up to half a million homeowners in Andalucia IT was fittingly described as ‘the beginning of the end of Third World planning for Andalucia’.

And Junta planning boss Jose Maria Morente isn’t half wrong about that.

Having worked in the planning departments of Benahavis, Ronda and Marbella since 1991, the architect knows a thing or two about the property chaos that has caused chaos around the region for the last two decades.

I have also been at the sharp end since I found myself in 2007 surrounded by hundreds of expats with supposedly illegal homes in Almeria.

While I was looking for a slower pace of a life in the sun having worked in banking in London, I ended up getting involved in local politics and running pressure group Abusos Urbanisticos Almanzora No! (AUAN).

Since then I have fought for over a decade for the thousands of expats wronged by the Spanish property system,

Leaving the Third World!

STUNG: The Priors had their home in Almeria knocked down, while (right) Maura

be they in Albox, Mijas or Chiclana. Sadly I was unable to help the Priors, whose home was bulldozed in 2008.

Now, after years of battling things are finally moving.

On September 24 the Junta approved a decree that aims to deliver some practical and workable solutions to the issue of illegal houses while getting on with the task of enacting more fundamental reforms to the planning laws.

If you are one of the estimated 327,000 homeowners caught in the trap of owning

MORTGAGE THINK TANK

an illegal/irregular property in Andalucia then you will be interested to learn that this new legislation delivers the following benefits for you.

Properties lacking paperwork, basic services or whose planning permission has been revoked will benefit as follows: The decree allows most properties built irregularly before 2013 to apply to their town hall for a document called an AFO. This document represents a declaration that the property

came into existence outside of the planning regulations but is now recognised and accepted by the authorities.

The concept of an AFO has existed for years on rustic land but has now been extended to all categories of housing.

In a further new development, you can apply for an AFO even if your planning permission has been revoked, providing you meet the relevant conditions.

Once the AFO has been issued,

by mortgage broker Tancrede de Pola

Punishing the pound WITH Brexit just a week away, the mood among British house hunters in Spain is highly uncertain.

After UK Prime Minister Boris Johnson finally secured a withdrawal agreement for Britain to leave the EU, the pound surged to €1.16 for the first time in years.

However the optimism was not to last and the value subsequently dwindled due to fears of Johnson not being able to get the necessary support in the House of Commons. And it is certainly going to be a tortuous week or two ahead.

In response to such a volatile climate, Spanish banks have been modifying their conditions in order to mitigate risk.

Coupled with this Brexit uncertainty is Spain’s new

Banks are cutting back on lending on expats who don’t earn in euros, writes Tancrede mortgage law, both of which have seen banks revert to more risk-averse lending patterns.

Established this summer, the Government’s Article 20 of the Real Estate Credit Act (Ley de Crédito Inmobiliario) makes it more difficult for expats seeking a mortgage if they are not in the eurozone, specifically, if they derive their incomes in a currency other than the euro.

This is because the borrower has the right to convert the mortgage into their own currency, under certain circumstances, at a later date, which could lead to losses by the bank.

This means that some banks are only lending to euro earn-

ers and others are reducing their loan-to-values for British clients, in particular.

As always, different banks interpret the laws in different ways so their lending policies can diverge considerably.

Obviously, as brokers, we have to know what each

bank is willing to do and are able to guide our clients into the right product, according to their requirements and personal circumstances.

Get in touch for the latest updates on each of the main banks.

To contact Tancrede for all your mortgaging needs call: 666 709 743 or for insurance queries call: 951 203 540 Email: tdp@thefinanacebureau.com The Finance Bureau Centro Commercial Guadalmina, 2nOffice No. 7 Guadalmina, 29670

the homeowner can then, in general, legally segregate their land, register their property at the Land Registry and connect to services such as water, electricity and sewerage, providing those services are in reach of the property.

If such services are not in reach you must provide alternatives, such as a septic tank.

There are exceptions. Properties less than six years old are ineligible because action can be taken against them for building without planning permission.

Properties on specially protected land can also have difficulties.

The costs of an AFO are met by the applicant.

The limitations of an AFO There is a widespread misconception that an AFO places limitations on a property.

In reality, if your property lacks a ‘license of first occupation’ you cannot be given planning permission to do any form of works.

However, with an AFO you can be given permission to maintain the property and to perform works of conservation and repair.

Unfinished urbanisations The decree allows your town hall to develop a Special Plan to provide the minimum of missing infrastructure to your development with the costs being shared by all interested parties.

Special Plans can be delivered relatively quickly in comparison to the traditional town plan which takes an average of nine and a half years to be approved and more often than that fails to be executed due to issues of

cost and complexity.

This is not an amnesty No, this is not an amnesty.

Unfortunately, among those innocently defrauded by unscrupulous developers or those given bad advice you have others who simply ignored the law and built where they wanted.

While this flouting of the law can be somewhat excused by the lengthy, rigid, and constantly changing planning system, the government must strike a balance between the needs of affected homeowners, the demands of society in general and care for ecology in particular.

The decree is not a magic wand solution but it is a real world one in my view.

What to do?

The solution to your problem is now in your hands. You are under no obligation to apply for an AFO. It is up to the individual to decide if this new legislation allows them to escape the legal vacuum in which they currently reside but I urge you to take the time to consider the possibility if you live in a house built irregularly and you do not have a first occupation licence.

Maura Hillen is the President of Abusos Urbanisticos Andalucia No (AUAN). She has been a councillor and deputy mayor of her town.

PROPERTY

III

September 25th - October 8, 2019

PROPERTY

XVIII

October 2019

Very Very Properly WITH 1,500 houses already on its books, it is anything but a new agency.

In fact, slick new property portal Propertissimo is merely a more Anglicised version of leading Swedish estate agency Maklarringen.

It offers every one of its properties along the Costa del Sol, and everything is in clear, plain English.

“We are anything but a startup and have in fact been on the coast for two decades,” explain co-owners Thomas Malm and Johanna Lindgreen.

“The new site has roots in Sweden and the standards in real estate are on another level than the one we face in Spain.

“We have an international code of conduct and we have proper compliance rules in place, while every property you see on our webpage we have seen, we have a direct contact and contract with the vendor. This means we know the property, the seller and his motives and therefore know if the property suits your criteria.

“We also have a substantial amount of exclusive listing that you only can buy through us.”

The Property Insider le

Holiday hold up!

I RECENTLY wrote about the new regulations which require a majority of owners to ban holiday rentals within a community.

As a result we began to receive a number of emails from concerned owners who received a notification from their community as per the one below:

“We have an apartment in San Pedro we rent out through online portals like Booking.com. We pay the community fees, but now we have received an email from the president saying that three-fifths of the owners have voted to stop others from renting out their properties for holiday rentals. We understand that as we have been renting our apartment out for two-anda-half-years and have a license that we are not affected by this ruling? We look forward to your reply.”

It led me to seek out a legal opinion, with lawyer Adolfo Martos Gross of GAM Abogados, who confirmed the owner was in the right.

He confirmed that there

Can a community stop vacation rentals? Adam Neale does a bit of digging to find out

was a significant change in the law on March 1 (Royal Decree 7/2019), which indeed required three-fifths of a community to agree in order to adopt a resolution that limits holiday rentals, when previously unanimity was needed.

The new law also stated that the owner of a holiday rental property should pay more community charges than the rest (up to a maximum of 20% more).

However, and this is important, the new law ruled that new resolutions ‘shall not have a retroactive effect’.

So if a client can demonstrate they were renting the property out prior to the introduction of the ban, and moreover had a valid license to do so from the Junta, the community would have no rights to limit the holiday rental activity.

However - what about other cases where the situation is less clear cut?

Say owners who were intending to rent but who had not got around to applying for a license before the ban was introduced?

Or someone who purchased earlier in the year and was in the middle of a reform with the intention of renting when suddenly the community ban came in?

Adolfo believes the new rules should not affect current owners, whether or

by Adam Nea

not they have begun renting, because that entails a limitation on ownership that did not exist when they bought the property.

He believes limitation can only be imposed on future buyers, but as no case law yet exists there is no way to clarify such ambiguities.

There are further issues as the new law fails to insist that new community rulings are registered in the Land Registry.

This is important because by being registered they are enforceable to future owners and provide transparency for buyers.

Note to buyers: Since there is no demand for these rules

to be recorded in the public community statutes or land registry, it is very important for prospective buyers to check (or ask their lawyer to check) the minutes of community meetings (which are not public).

These could show that a restriction has been introduced.

Similarly buyers who purchased in good faith and were not aware of the limitations of use approved by the community, because they have not been made public, may have grounds for objection.

We’ll come back to this topic as and when matters become clearer (or not)!

Terra Meridiana, 77 Calle Caridad, Estepona • 29680 • Tel: +34 951 318480 Office Mob: +34 678 452109 Email: info@terrameridiana.com Website: www.terrameridiana.com

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III

September 25th - October 8, 2019

PROPERTY

XX

October 2019

Bridge over troubled waters In his latest quarterly report on the Spanish property market, surveyor Campbell Ferguson warns of Autumn turbulence ahead (with a silver lining, at least) Let’s get Brexit out the way As I write, we still don’t know if there will be a deal or not. While a deal looks increasingly possible, nothing is certain before October 31. What is certain is that the treatment of British passport holders here will mirror the treatment of Spanish resident in the UK. And fortunately, we are not seeing the xenophobia in Spain that is being reported in Britain, but we still may be penalised for it.

23rd Quarterly Market Report – Summer 2019 - PART 1 SPANISH politics, rollercoaster exchange rates, climate change and the bane of Brexit are all taking their toll on the local property market.

We, at Survey Spain are concerned about the apparent reduction of buyers’ interest over the majority of the Spanish market.

However, as with the huge number of agents, there are now so many developments to choose from, actual buyer numbers may not have reduced as significantly as it might appear.

Currency fluctuations Every time a deal looks likely, the exchange rate ‘improves’, to the benefit of holders of sterling. But it’s a ‘rollercoaster ride’ with numerous rises and falls - it’s gone up by 5% in the last few days! Many buyers and sellers will inevitably be delaying until they know more of what’s happening. Brexit affects many economies throughout the EU and beyond and comes at a time when indicators are already showing the possibility of another recession.

Catalan politics

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Spanish central government politics The egos of Spanish politicians will not allow them to govern together (Does this sound familiar?). November 10 will see the country’s fourth general election in four years, with cooperation and compromise required thereafter.

Politicians of all countries and regions have not been shown in a good light.

Property will be affected whichever way the vote goes.

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The situation here is troubled, since the sentencing of the separatist politicians who led the unconstitutional independence vote. Barcelona has a history of anarchy, which still has a strong influence as recent street protests have shown, all to the detriment of Spain’s national economy.

16/01/2019 11:40

Hotel sector lobbyists have been pushing for restrictions on private lettings. And neighbours are outraged by tourists behaving in wild, noisy and often offensive fashion at all hours. One lot leave exhausted, then another par-

ty arrives to start all over again. It’s good money for owners, who price out the ‘locals’ from buying, but it reduces the number of properties available for long term lets, in demand from workers in the area.

It also leads to the breakdown of public services in tourist areas as nobody can afford to live there.

It is leading to rental controls in many areas and the Supreme Court has recently ruled that local authorities can do the following: the frequency of 1tingLimit tourist rentals, preventhem from being allyear round

2 ce

Require an identification sign at the entran-

Ensure the property 3 complies with minimum standards on a 24-hour hel4Insist pline owners to pro5Require vide rental reports Effects on property prices Many second home properties are bought to rent out while not being used by the owner to cover mortgage costs. However, high-priced pure investment buying and costly regulation compliance make this finance model in danger of collapse. That means fewer buyers in the mid-price bracket, as lower prices can be bought with cash and the upper market from bonuses or the like.

New builds ‘stuttering’ There is so much of all types of property being built that it is bound to exceed demand. Prime locations always attract the most buyers but there has been considerable

development in secondary locations, as permissions were difficult to obtain elsewhere and the promoter had money to spend.

Now, there is a gradual recognition that there is overbuilding … again!

Difficulties in selling, or sheer desperation, has seen agents’ commissions escalating to 10%, plus even sometimes €5,000 paid to the individual introducing the buyer.

Some construction is frenetic, as the contractor wants completion before the finance stops. Others, where finance is linked to sales, slow down.

Climate change – Life must change for us all Too many people are avoiding thinking about this, as changes will be radical.

How will we cope? Flights could be severely curtailed; beachfront gardens below sea level could be lost; less rain and the rising costs of desalination pushing up water prices; a shortage of power to charge cars and other electrical equipment after the change-over from oil, gas and our beloved log fires. Governments will charge higher taxes to compensate for lost fuel tax, etc, etc.

Change must come within 10 years. Certainly, as valuers, we are having to consider how the market will adapt.

And the Good News Despite the uncertainties and inability of individuals, families and businesses to plan, the sun still shines in Spain and, although radical change is needed, the current climate and lifestyle remains the envy of the world.

For more information visit www.surveyspain.com

PROPERTY

III

September 25th - October 8, 2019

PROPERTY

XXII

October 2019

No LFO, no go!

In a series of new articles, lawyer Raymundo Larraín Nesbitt explains what a Licence of First Occupation is and why it is vital for anyone buying a property in Spain THE Licence of First Occupancy (LFO, for short) is a crucial document, particularly when buying off-plan property in Spain.

It draws a line between what is legal and what is not and does not (usually) apply to resale properties.

Definition

A Licence of First Occupation is a certificate issued by a town hall which confirms that a newly-built property (off-plan) fully complies with all planning and building regulations and is fit to be used as a dwelling.

It assures the property compliance with health, access, safety, planning and construction laws, and that it has been fully completed, with no outstanding works.

The LFO allows buyers to live in a property legally and is also known as a Habitation Licence or Certificate of Habitation and in Spanish, Licencia de Primera Ocupación or Cédula de Habitabilidad.

The licence’s importance

It is important mainly for four reasons: It provides a check on the planning legality. A LFO means the developer has built the dwelling in accordance with the town hall’s building licence as well as with all local and regional planning laws. The inspection to grant this licence is carried out by town hall’s technicians, who certify the dwelling is deemed appropriate for human habitation.

It is required by utility companies to have access to official supplies: water, electricity and gas. Spanish law requires the granting of a LFO to hook up the dwelling to the supply grid.

Lenders will ask for it if you require finance. Banks will also be asking you for a LFO. Even on reselling the property, your buyer may request a copy for his own lender.

Holiday lettings. If you are looking to buy as an investment (buy-to-let), a LFO is required by Regional Tourist Authorities to rent out your place in the short-term. If your property hasn’t attained it, you will not be able to legally rent out your house and may be landed with enormous fines if caught red-handed.

The fines for non-compliance are six-figures in some regions of Spain.

Conclusion

Be wary of anyone downplaying the importance of a LFO on off-plan property, or any property, claiming it is unnecessary.

You’d do well to follow my draconian advice: do not to complete a purchase of a property without a Licence of First Occupation.

Larraín Nesbitt Lawyers is a law firm specialized in conveyancing, taxation, inheritance and litigation. You can contact us by e-mail at info@larrainnesbitt.com, by completing our contact form or by telephone on (+34) 952 19 22 88.

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Why the time to invest is now

And here are my five best reasons to invest in Spanish property this autumn 1. Store of value. In times of political instability, leading to stock markets in upheaval, gold and real estate have traditionally been a safe haven where the affluent ploughed their money safe from the storm.

2. Security. Real estate is a tangible asset which you can touch and see, unlike cryptocurrencies and other intangible assets where thefts are rife.

3. Capital appreciation. Real estate increased by at least a single digit sum over the last four years in Spain, in some areas even by two digits. Some experts even talk of a new property boom underway. On the long run real estate always trumps any other asset class, including stocks.

4. Soaring rental yields. Rental yields in Spain have soared by double digits over the last three years. Spain is the world’s second biggest tourist destination creating a huge demand for holiday accommodation.

5. New laws passed. In Andalucia these allow ultra-low inheritance and gift tax. April 2019 saw the approval of new laws which, for the first time in 40 years, allow owners to pass on their properties to their beneficiaries with hardly any tax, or no tax at all, in most cases.

PROPERTY

XXIIIIII

September 25th - October 8, 2019 October 2019

G for gravitydefying A GIRONA-based architecture firm has won acclaim for its latest topography-defying project - a luxury home embedded in the side of an impossibly steep hill.

The white-washed property sits above the coastal town of Tamariu, on the Costa Brava, offering a new angle on stunning sea views from its precipitous perch.

The interior living areas are organised around the fireplace, creating a sequence of double-height spaces oriented to the south, bringing sunlight inside the house.

An outdoor terrace next to the dining room is protected by sunshades and fosters life outside the house.

Both the exterior and the interior are designed to enjoy the Mediterranean climate, placing all the main spaces on the south side, facing the sea.

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No spanner in the works MAR Vicens has hammered out a generational project in Mallorca by turning her father’s ramshackle tool shed into a fabulous living space.

The 34-year-old Spanish architect teamed up with her Dutch partner, Ask Anker Aistrup, 39, also an architect, to create this perfect hideout hidden in the Tramuntana mountains.

The site had been bought for Mar on her 16th birthday and the family, originally from Valencia, often went for a day out at weekends, but could never stay over, something which is now possible.

The couple’s company Mar Plus Ask have created two miniscule off-grid structures, each measuring around 120sqft.

The project, which took them just four months to complete, enshrines the concept of minimalism with natural materials.

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Four contemporary mews-style houses will be built on the foundations of the 19th-century stables, at the rear of the original, grand Victorian house, which will itself be refurbished to provide 2 thoughtfully designed apartments and a stunning duplex penthouse, commanding spectacular views. Mews houses are, by their nature, located in the very best parts of town. Providing a safe, traffic free environment that is both practical, and hugely charming.

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