Spanish Property Investment Advice 

Brought to you each week by our property expert, Iain Maitland.

Posted on 16 June 2006

Spanish Economy is in the Middle of 11th Year of Growth

The Spanish economy is now in the middle of its 11th year of constant growth - an annualised 3.5% increase for the first quarter of 2006 which compares with an average increase of 1.9% across the European Union. And yet still the doom-mongers are telling us the property market is about to crash! Not so – the economy is growing nicely, immigration is rising, property demand is outstripping supply in the hotspots and interest rates will stay relatively low. Yes, I am aware of inflation and credit figures and what have you but the overall outlook for property remains positive.

We talked last week of timeshare scams as eight con-artists from Andalucia were arrested with regard to 15,000 cases of members of the public being conned. I have no doubt that we will see further cases this summer. If you are thinking of investing in Spain, please do not make any decisions on your summer holiday. Go out of season, do the due diligence, take professional advice etc. And do not buy into a timeshare! As investments, they simply do not stack up in my view. And if you own a timeshare and are cold-called by someone offering to market it for you, put the phone down. I have yet to come across any cold-calling company I would want to do business with. In my opinion, well-established companies you would want to do business with do not use this form of marketing.

Still on a miserable subject, the Costa del Sol Action Group tell me this week that they have a reported 17,000 cases of financial products being mis-sold to foreigners in the past 12 months. Lots of names and cases and what have you arrive on my desk each week and I have to be careful about what I pass on to Brits buying overseas. However, in the light of some news coming in right now, I would like to draw your attention to a Mr John Doust who has been in a spot of bother in Spain this week. I think it would be easiest to suggest you visit www.johndoust.co.uk for more information!

If you are buying a financial product from anyone, can I urge you to make sure you know who you are actually doing business with. I have received a dozen or so reports this week from people who bought cheap travel insurance online via agents. They thought they were doing business with those agents. Not so, the deals were actually with a Jersey based insurer which has just ceased to trade leaving our friends high and dry. If you want maximum protection, check the firm you are doing business with is authorised in the UK by the FSA. Go to www.fsa.gov.uk and search the FSA register. Of course, the fact that a company is based overseas does not mean they are crooked! However, as a UK national you may not be as well protected if something goes wrong.

Finally, I have been saying for some time that I expected the Euro interest rate to reach 3.25% this year and it seems that other currency pundits are now falling into line following the European Central Bank increase in Eurozone interest rates to 2.75 per cent. It is not rocket science – all you have to do is to monitor the forward rates in the market and they tell you what will be happening in three months time. If you are debating whether to fix or what have you on investments and borrowings, knowing that the Euro rate will be 3.25% at the year end may help you to reach the right decisions!

All for now

Iain Maitland

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