House Hunter: Valencia

'We want a Spanish home by the sea'

The problem

MICHAEL AND EVELYN BUCKLEY, OF NEWPORT, GWENT, WRITES: An inheritance means we can afford to buy a home in Spain. We want to avoid the overdeveloped costas and choose somewhere that combines proximity to an airport and a city with being near the beach - we may even buy a boat.

What about Valencia on the eastern seaboard of Spain? Our family would use a property there for four one-month periods each year, and at other times we would rent it out. Our budget of £300,000 for a property with at least three bedrooms sounds a lot, but having looked at websites, we know our choices will be limited. We would be willing to test the market first by buying a smaller, cheaper property to see if we are happy renting out.

The advice

GRAHAM NORWOOD REPLIES: Valencia has a tremendous future but you must choose any potential purchase with extreme care. A 1994 regional law, the Ley Reguladora de la Actividad Urbanista (LRAU), allows developers to compulsorily purchase land if the local area is redesignated from rural to urban development.

The creeping building programme across the region means areas that were rural 10 years ago may be semi-urban now. As a result some owners have lost their properties - allegedly receiving compensation at sub-market values.

"The LRAU is defended by some as fair and socially justified. It has been cynically abused in many cases, causing appalling suffering and anguish to owners of many nationalities including those from Spain and the UK," says Alan Owens, of the London law firm Irwin Mitchell, which is setting up a campaign for victims of the law.

"To avoid problems, you must have a good solicitor and an estate agent who knows the area and is well-established. A lot of people have wised up to the problem so there is less about, but it still needs vigilance," says Michael Beckmen, of London-based Apremont Overseas Property ( www.apremont.co.uk, 020 8457 7557).

The broader Valencian region has almost 500 kilometres of coast and an imposing mountain range rising 2,000 metres. Its reputation for citrus growing and some shrewd public relations have resulted in the area being known as the Orange Blossom Coast.

Valencia itself, Spain's third largest city, has an interesting mixture of period town houses and modern villas. It has also become one of the country's transport hubs. Valencia airport is close to the city centre and has a new terminal for the increased volume of budget flights from the likes of Easyjet and Ryanair, as well as German low-cost airlines. An improved rail service means Madrid is just two hours away.

Beckmen says prices in the Valencia region and south through Murcia have "stormed ahead" in recent years. "It's difficult to describe it still as an emerging region because people follow budget airlines, so Valencia has now been well and truly discovered. But prices for the moment have stabilised," he says.

Local estate agents say that Valencia property prices rose about 15 per cent in 2003, 12 per cent in 2004, and 4 per cent so far this year. Even so, they are still only about 65 per cent of those on the traditional, touristy costas.

The solution

Option one: A four-bedroom period house.
Price: £272,000.
Agent's details: This restored town house is in the main plaza of Canals, a historic town in the Valencia region. The third floor could be converted to separate rented accommodation. A brook runs through the back garden, which includes patio area and space for a swimming pool.
Agent: Jackson-Stops & Staff International, 020 7828 7387.

Option two: Three-bedroom house.
Price: £180,000.
Agent's details: In the suburb of Cheste, this modernised three-bedroom house offers gardens, a swimming pool, outside changing area and large garages. There are views towards Buñol and the mountains.
Agent: Valencia Property, 00 34 9027 47425 or www.valencia-property.com.

Option three: Three-bedroom town house.
Price: £90,000.
Agent's details: Casa Castillo has been meticulously restored but retains its original style. It is close to the castle in the historic part of Bolbaite. The lounge/dining room has a fireplace. There is a fully fitted kitchen, three double bedrooms and two terraces with magnificent views.
Agent: Jackson-Stops & Staff International, 020 7828 7387.

Fact file

Any plan to rent out your property will be given a boost by the America's Cup, the world's greatest yachting tournament, which is held in Valencia in 2007. Some competitors are practising in the area and qualifying races take place next year. Buy now and advertise quickly to attract some of the 200,000 visitors expected.

The Cup is predicted to bring up to €1.5bn (£1.03bn) of investment to the city, mostly through a totally renovated inner harbour, a dock for super-yachts, a new canal, a public park, modern offices and shops at the port area. The last event in Auckland, New Zealand, was watched by 2.9 billion television viewers.

There are only 500 hotels in the region, so hotel rooms will be at a premium, and renting places for several months should be a reliable earner. And you should benefit from increased demand pushing up prices. As you won't be living in the area permanently, it is best to hire a local lettings agent to manage the rental side of your property.