Overseas Property: Spain

Graham Norwood presents a guide to buying property in Spain, our favourite place in the sun

It is not just in the UK that house hunters are stepping up a gear as the traditional sales season gets into full swing. The same is happening among would-be purchasers in Spain, which remains the favourite overseas holiday home location for Britons wanting to buy into the sun.

The Government's Office of National Statistics says some 69,284 properties in Spain are owned by Britons, although these include those owned by people still officially resident in Britain and who declare their second home to the Inland Revenue. In reality, many more are likely to exist.

A separate report from business intelligence consultancy Datamonitor says more than a third of the tourist housing stock in Spain is owned by Britons. If you want to join this fast-growing club, here is the definitive nine-point guide.

JUDGE THE MARKET

Britain's Royal Institution of Chartered Surveyors (RICS), which conducts an annual survey of European housing markets, says Spain's has been the strongest of them all, rising by 120 per cent since 1998.

Buyers should accept that the huge price rises of the past five years have gone, probably for good, as most of Spain has seen a step-change in infrastructureimprovement and the move to low Euro-zone mortgage rates.

Typical property prices will vary significantly from region to region. Premium prices are charged for new properties and all homes in large cities are expensive. But a rough guide for good quality second-hand homes in good locations would be: studio apartment: £75,000; one-bedroom apartment: £120,000; two-bedroom apartment: £145,000; two-bedroom villa: £170,000; three-bedroom villa: £240,000; five bedroom villa: £380,000.

SPANISH ESTATE AGENTS

Although there are many English-born estate agents operating on the Costas and now in some cities, most agents away from the densest tourist areas are unlikely to speak Spanish.

Their websites are not as sophisticated or accurate as in the UK. Often a property will be registered by its seller with different agents, sometimes at different prices, so check around to get the best deal.

THE BUYING PROCESS

Once you find a home you like and agree a price - it is not unusual for private sellers to settle for 85 per cent of the asking price - the buyer's conveyancing solicitor must establish the property has clear ownership titles and is free of debt (any unresolved debt at the time of purchase falls to the new owner).

Both parties then sign a contract containing local government search details, purchase price and date of completion if it is a new home. A deposit of 10 to 15 per cent is normally paid by the buyer. If the buyer pulls out he may lose the deposit; if the seller withdraws, he must reimburse twice the total of the deposit. On completion day buyer and seller sign the title deeds, or Escritura de Compraventa, and the remaining 85 or 90 per cent of the purchase price must be paid.

LEGAL ADVICE:

There remains concern in the Valencia region of South-eastern Spain that, despite recent law reforms, developers still have powers to redesignate land from rural to urban. This allows them to compulsorily purchase properties in the way of larger-scale developments. It is vital for a bi-lingual solicitor to check title deeds if you buy there.

FEES

Always allow at least 10 per cent of the purchase price to cover transaction fees. These are likely to be broken down as: seven per cent property transfer tax, notary and Land Registry fees of about one-and-a-half per cent, and there may be additional local taxes to cover utility switch-on. If you buy a new-build home from a developer you may pay up to 12 per cent in VAT and related taxes.

RESIDENCY

Since 1991, Spain has issued residency to some 400,000 UK citizens. Sometimes medical and financial checks are made, although the process is quicker than it used to be. It can usually be done in four months, providing you spend 50 per cent of the year or more in Spain. Check for details with the Spanish embassy on 020 7235 5555.

TRAVEL

There are over 500 flights a day from the UK to Spain's 14 international airports; there are another 31 regional Spanish airports used for mainly internal flights. The busiest routes are to Malaga, Alicante and Barcelona. Car hire is easy throughout Spain, although expensive. Train services are generally fast and frequent although local routes are still served by trains dating back to the 1950s.

EDUCATION

Pre-school education is now freely available in cities for children from the age of three. Age five and over, schooling is compulsory at a primary school until 11. Secondary schooling is then compulsory until 17 although many students go on special two-year Bachillerato courses to prepare for university. British ex-pats routinely claim Spanish education to now be superior to Britain's.

WELFARE

Spain has less generous welfare payments than Britain. Britons staying temporarily or permanently in holiday homes can use Spain's modern health service relatively freely via E-forms now common throughout the European Union - check with your British GP. Britons who are not resident most frequently use E111 to cover emergency treatment.

Contact www.practicalspain.com; www.the-british-in-spain.com; www.idealspain.com; www.searchandsurvey.com and www.justlanded.com