Wow! Talk about coming to roundabouts and not knowing which way to go.
Decreto Real 818/2009 stated that foreign driving licences from other EU states were valid in Spain for a period of up to 6 months. After that time, if taking up residency, the licence had to be changed to a Spanish one. This means that, if you are visiting, you can drive on a UK licence. So far, so good?
Decreto Real 2012/126/EU stated that a photocard EU issued driving licence was now valid in Spain for a period of 2 years when a medical would then be needed and the licence would need to be changed at the same time. Still so far so good, until the spanner in the works appears.
Costa Consulting Bureau (no, I don't know who they are either) checked with DGT Malaga and found that this only applied to those who had the old style paper licence, not the new EU issued licence. The photocard would only need to be changed when it expired (according to them, it was when the photocard expired, not the paper licence). Now not quite so far, so good.
So, the law (which is what Real Decretos are) keeps changing but people still mix them up quite a lot.
Personally, I changed mine to a Spanish one because I'm sure the police will be just as confused and, no, I don't fancy arguing the toss with a Guardia Civil officer.
Maybe public transport would be a better idea.
Thread: British driving licence and Residence in Spain