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During the property boom in Spain, there was a massive spike in building and lending activity. Numerous large developments were built with the foreign investor as the prime target audience. Some of the key names in the property development world at the time included Polaris world, Oceanview, and MRI.
Bought the ‘dream’…
Areas in coastal regions such as Costa Del Sol & Costa Blanca were of key interest to the overseas property buyers. They were seeking the picturesque, tranquil, holiday location that the brochure sold. Property developers were selling ‘dreams’ to foreign investors and many UK and Irish customers were sold on this ‘dream’. A luxurious golf and country club or the desire for a property overlooking the sea.
According to the reports of the Bank of Spain; from 2000 to 2009, 5 million new housing units had been added to the existing stock of 20 million. Some of the areas which we know were affected specifically, include; Roda Golf, Manilva Hills, Corvera, Torrevieja, Estepona and Los Alcazares.
During this time, it was presumed that buying property in Spain was as ‘safe as houses’, pardon the pun. Banks were far too willing to lend money and coupled with a corrupt planning regime; this resulted in a toxic concoction that was only ever going to end one way.
Living the nightmare…
After the property bubble burst prices started to fall. Buyers became less and less eager and developers, starved of loans by Spanish banks going bust.
In the lucrative areas where the ‘dreams’ were sold, particularly the coastal regions of the Costas; there are unfinished developments without water and electricity, and without any prospect of being sold. For those that were finished, people are left with a property that they no longer want, that is in a deserted and run-down development. The dream is now a reality, a harsh and very different one than what was sold.
Many re-mortgaged their own homes in the UK to raise equity. This has put their own homes at risk at a time of life where most would want to be retiring and enjoying life.
Speak to the experts in foreign property debt!