Currency dilemma

Normansands.......this is a Forum (a place for discussion rather than a place to gather information).... hence Pitby can make any posts he like regardless of whether or not you see it as relevant...I seriously doubt he was inviting you to go anywhere with him

Your own reply to him was totally pointless and , frankly ,rude.

Normansands, you said:

"On the planning side how is it possible for a developer to change the plans after sales are made and the complex have extra blocks built, pools and gardens reduced?

As to the legal side, that is astonishing, how is it possible to buy a share in a highest luxury, front-line golf, closed holiday complex with every possible holiday facility and yet end up with an undersized very basic poorly built (failed survey) "affordable" apartment with nothing else except a splash pool on an open public urban situation?

What manner of contract allows this and is accepted by your expensive lawyer."

I merely pointed out that, as astonishing as it is, it happens everywhere.  It is not specific to Spain.

As to how we pay our mortage, not that it is of relevance here, but we convert from dollars as the UAE Dirham is linked to the dollar.  So, the apartment that we bought off plan in 2003, when it cost us Dhs4 for one Euro, cost us nearly Dhs 6 for one Euro when we completed early last year - hence nearly fifty percent more!!  We have had it particularly bad here, being linked to the dollar and paid in Dhs.  But you make your plans and, hopefully, make them with some foresight, if that's the right term.

I don't take your post as being a rude response to my earlier one (although thank you, Whistler!!), but maybe it should be borne in mind that this is an open forum.  I was merely pointing out the obvious.

If you click the link under my signature you will see where our apartment is in Spain.

I find this thread quite interesting, especially as I woul have expected that an engineer would have in his career seen many instances of parts tyurning up to site nad being incorrect in both size and style, I woul dimagine that on a number of occasions improvisation was needed ....and used. Which is not unsimilar to purchasing both in the UK and abroad- there are many small parts that make up the whole and inevitable a number of these alwya seem to be overlooked.

 Providing a building is not unsafe and the purchaser is happy then that should be that, there are many instances in the UK of similar disputes, who is a good builder in the UK?

Yes there are building standards however UK developers like those abroad are building simply for.........profit and as such will build out as cheaply as they possibly can.

On and on the currency theme!

 Simply many people do not plan thoroughly enough and all should have a "worst case" scenario I watched a tv show last year about repossessions in the UK it featured a lovely young couple who both worked and calculated that if they purchased they woul dhave £100pm left after food, bills etc-they were then facing repossession-WHY? Well she became unexpectedly pregnant-sympathy-none from me.

Why would people want to leave Spain and return to the UK, I do not beliEve there are very many things at all that are less expensive in the UK especially if you live in London.

The rate of euro-sterling has hurt many however in 60% of the cases they could make up the amoun they have "lost" simply by shopping around in the UK in respect of their current finances etc.

I find this thread quite interesting, especially as I woul have expected that an engineer would have in his career seen many instances of parts tyurning up to site nad being incorrect in both size and style, I woul dimagine that on a number of occasions improvisation was needed ....and used. Which is not unsimilar to purchasing both in the UK and abroad- there are many small parts that make up the whole and inevitable a number of these alwya seem to be overlooked.

 Providing a building is not unsafe and the purchaser is happy then that should be that, there are many instances in the UK of similar disputes, who is a good builder in the UK?

Yes there are building standards however UK developers like those abroad are building simply for.........profit and as such will build out as cheaply as they possibly can.

On and on the currency theme!

 Simply many people do not plan thoroughly enough and all should have a "worst case" scenario I watched a tv show last year about repossessions in the UK it featured a lovely young couple who both worked and calculated that if they purchased they woul dhave £100pm left after food, bills etc-they were then facing repossession-WHY? Well she became unexpectedly pregnant-sympathy-none from me.

Why would people want to leave Spain and return to the UK, I do not beliEve there are very many things at all that are less expensive in the UK especially if you live in London.

The rate of euro-sterling has hurt many however in 60% of the cases they could make up the amoun they have "lost" simply by shopping around in the UK in respect of their current finances etc.

"it is good to hear both sides of the debate, but only when all the information is provided. So much is generally not declared by the enthusiasts (for and against)."

"Clearly anyone whose income is in pounds and expenditure is in euros has suffered and if the stats' are to be believed then the trickle of returnees to Britain has now become a stream, if not yet a flood."

Hmm! Ok just want to answer this in a manner that is on-topic.

How can you say in your 1st statement that "so much is generally not declared" when if you read my posts I declare as much info that I think is needed WITHOUT making myself appear to be belittling people, as in fact most others also post in the same manner.

And I have also pointed out that even though our current income is in Sterling and the exchange rate IS hurting, that the fact the Euribor rate has diminished to such an extent that what we save on our mortgage MORE than out ways the diminished income due to the ex-rate being so low.

I also find it of great interest that you seem to think the flood gates have opened for the 'masses' to return to the UK. I would say that the reason is because they think they will be better off back in the UK, when the facts clearly show that they won't due to the costs of living, unless they intend to sponge of the state!

The fact remains that YES, the ex-rate is in rapid decline however the 'smart' money can see that even though there is an abundance of property available not just here in Spain, but also Turkey, Bulgaria and any other country that relies on overseas property purchase, that the properties are LOWER in price than they were at the pinnacle of the boom however Interest rates have declined and will continue to decline. Thus now is a good time to purchase an overseas property IF you are in it for the long term, as the trend of low interest rates will be with us for a long time, and the property markets WILL start to move again in the mid to long term and there is an abundance of 'bargains' to be had.

Irrespective of whatever monetary mortgage one has, interest rates are falling and will continue to fall, and will then stay low for some time to come, so the ex-rate with regards to Sterling/Euro is really co-incidental when it comes to a new mortgage.

You asked for some more information, so I hope this helps.

Last night me and the wife attended our friends son’s 21^st birthday party, down the kings’ road Chelsea in London, I brought four small bottles of beer. £11.50

Dear All,

thank you for the additional sensible comment.

As a distressed new investor, I try to understand what has occurred and what can be done to recover a substantial part of my life's savings and perhaps be more successful next time, if given the opportunity. I would also like to see the system itself improve.

From the media I gather that the value of the £ was based upon our enormously successful free-market financial centre, not on what the country produced and sold as a manufacturer and producer. Unfortunately we seem to have duped the world with fantastically complex schemes that produced huge returns based on the City's wonderful reputation rather than any intrinsic nett worth.

This may be a simpleton's view of things but it seems to be basically correct and the bubble seems to have well and truly burst; with the new tight regulations proposed, the scam is not likely to be repeated.

If that is correct, then the £ is not likely to recover and for the tourist rate at least parity has already passed.

This surely will remove the bulk of British buyers from the Spanish market with again surely an extremely negative effect on that market's values.

It is difficult to see how modest decreases in interest rates will be the long term salvation to people shouldering large euro mortgages. Especially also if they are reliant to some extent on euro letting.

Please don't hesitate to put me straight if I have got things wrong.

Regards

Norman

If you are concerned as a "distressed new investor" yes while you are correct in citing many world events, I as both an adviser and an investor would suggest that you are looking too deeply, all that should concern you is how investments work for you and how to make the best / most out of any market, as in a current downturn as we are currently in, it  is also a prime time for opportunity, that said it is also extremely important to ascertain one,s attitude to risk.

We have a generic term as follows whch sadly is very true,

No one plans to fail , many fail to plan, sadly the result is..............the same! Correlation between assets is where many people seem to struggle an example being;

the amount of investors who have funds in both the UK and Europe-hey why bother because they are so closely interlinked that they wil either both do well or both crash, either way you may as well have invested all funds in one or the other, now on the other hand if you had funds divided between UK/Europe and the Asian market it would be completely different as there is no immediate knock on effect.

Oh and re original posting-exchange ratre still not looking good!

Due to work commitments and the fact that i cannot move Xmas back a few days and may not get the chance before Xmas, i would like to wish all EOS members a Peaceful, Restful and Enjoyable Xmas

"This surely will remove the bulk of British buyers from the Spanish market with again surely an extremely negative effect on that market's values."

"It is difficult to see how modest decreases in interest rates will be the long term salvation to people shouldering large euro mortgages. Especially also if they are reliant to some extent on euro letting"

Ah-ha! Now you have hit the nail on the head.

When you invest in property, I have always said that you need to be in a position to repay the mortgage without relying on any income from letting the property, as this will result in a good mid to long term investment in the property itself, and any income thus received from letting plus the fall in interest rates will prove to be very lucrative.

However lots of people have fallen foul of over-valuations on property which result in a 100% mortgage and in some cases a 100% mortgage plus purchase costs, as it is those deals that are now hurting the investor, as the property has now devalued and as it was over-valued to get the mortgage plus they were relying on rental income, they now cannot meet mortgage payments even though the interest rates have fallen. It is those types of deals that force people between a rock and a hard place, as they cannot afford to repay the mortgage and they cannot afford to sell the property.

As a direct result of everything that has transpired, you are now left with a 'cleaner' market where good properties can be found for a very good price, with mortgage rates that are substantially cheaper and will remain so for many years to come. Thus if you are a property investor now is the time to buy as the market will become buoyant again and your investment will gain over five to ten years.

So in keeping this thread on-topic, whatever happens with the ex-rate, the Brtis will still come to Spain for holidays in the sun, why? cheap flights, cheap accommodation, cheap car hire, cheap fuel and cheap food and wine with glorious almost guaranteed sun along the southern Costas.

Even if there is parity between the Euro and Sterling, yesterday I had a Christmas dinner and starter for 10.90€ and a couple of beers at 2.20€, then we moved on to another bar for 'happy hour' where I had  two more beers at 1.50€ each. Total cost for meal and drinks for the evening 18.30€ which is still well under £20.

Well put, TechNoApe.  The biggest squealing is coming from those who bought to make money, not those who wanted a home out of it all.

I had problems with my first purchase (still ongoing) but after reading advice on sites like this (especially like this) and doing my homework, my second purchase (also off plan) went well.  My builders have been excellent, the place is spot on (would you believe even the plumbing, sinks etc is earthed??) and, although a lot more expensive now in pounds, I restricted myself to a 40% mortgage so I haven't over extended.  The point is, do your homework and look around.  Don't be suckered by agents promising things which you know they can't deliver.  Agents that tell you they can guarantee a rental income are lying through their teeth so avoid them like the plague.  Look for what you want, in the area you want it and bear in mind currencies can go down as well as up. 

As for price of drinks and meals, well, I think they are still excellent value in Spain.  Yes, a vodka and tonic may be approaching UK prices but look at the amount they give you.  We took our work force out to a Christmas party last week, I bought one of the nurses a vodka (which barely covered the bottom of the glass) with a splash of lemonade, a gin and tonic for a receptionist and a coke for me (driving, unfortunately) and it cost £8.80.  I at least thought I'd get change from a fiver.......Plus the meal was £65 a head and nothing special, either.

Flights to Spain are still cheap, package holidays are still being sold around the 200 quid mark which is pretty good value.  The point of my previous post was that it annoys me when people come onto these forums and start tarring everyone with the same brush.  This is a forum about Spain so I don't know why Turkey, Morocco or Timbuctoo get dragged in.  Many thousands of people are very happy with their purchases in Spain and will continue to enjoy them for many years to come.  Please don't try and tell those of us who are happy that we would have been better off going elsewhere.

bobaol

Turkey and a few other places were used as comparisons........just as you have used the UK in your posting

The price of alchohol had little to do with our choice to come here and the cheap holiday packages (and all they involve) kept us away from Spain for years............

Dear All,

With the Euro at 95P and rising, the tourist rate already past parity, the "City Slickers" magic system discredited etc. etc. large numbers of British investors are, according to this forum, in extreme difficulties.

Where will the downward fall level out? Is the 50 cent £ a serious prospect?

Given also the acknowledged over-supply of Spanish properties and failing developers, discounting, buy-outs by banks, repossessions, how can this possibly be a good time to buy in Spain?

What is a "clean" market, I wonder?

What sort of market would make property a good investment in all these circumstances?

What property investor can afford to ignore rentals and still pay the mortgage plus all the other outgoings for the medium to long term?

What level of return would be required to make this worthwhile?

Are we expecting a boom of immense proportion?

Where would the huge numbers of new investors come from to fuel the boom?

Surely not Ireland which some are saying is the next Iceland.

I am afraid the logic is baffling me or am I looking too deeply?

Regards

Norman

A property investor will purchase a property in order to make a profit from the property purchase itself, as in the long term the value of said property will increase over time, as said investor is able to purchase this property outright or with a mortgage without the reliance of any extra income from rental of said property.

Any rental income is a secondary return during the long term investment itself, and one must remind oneself that there is also expenditure for the upkeep of said property during rental periods, thus the return is not construed as an asset during this time, merely coincidental income during the period of investment.

After a period of years, usually three to five years during the 'property boom' one would sell a property in ones portfolio in order to move quickly and maximise ones returns, however we are now back to the old days of mid to long term investment where one would purchase a property with a view to selling on in five to ten years.

However there are people that are not property investors that have fallen fowl of the sales pitch from disreputable real estate agencies, whether in Spain, Turkey, Bulgaria, UK, USA or anywhere else in the world, and have believed the 'get rich quick' with 'little upfront investment' and 'guaranteed rental return' scenarios and these are the people you are referring too, however I am referring to actual property investors.

Therefore as previously expressed during prior responses, there is a 'cleaner' market available as there are less 'gullible' investors around who CANNOT AFFORD to invest in property in the first instance, and it is these people who complain on forums such as these.

On the other hand you have people such as myself that have decided to have a lifestyle change, and having previously done ones research in a very thorough manner, and wadded through the 'flotsam and jetsam' of unreliable real estate agents and avoided the trap of 'guaranteed rental income' are more than happy with the outcome of the current crisis, as one was able to maximise the downturn in the market and purchase a property at 100,000€ LESS than the market price six months prior to purchase, with an ACTUAL market value of 70,000€ more than actual purchase price.

In other words we purchased a property worth 450,000€ one year ago for 350,000€ which was UNDER VALUED by the bank at 418,000€ !!!!!

This is why I KNOW it is a good time to purchase property in Spain, especially on the CDS as prices are lower than they were 18 months ago and will continue to fall in the short to mid term, HOWEVER in the mid to long term my investment WILL return more within five to ten years, and gone are the companies who sell their 'guaranteed rental return' and also are gone the 'gullible' so called 'property investors' that believed that tripe!

TRUE investors are returning as we speak, in Bulgaria, Turkey, UK, USA and especially Spain, as they know a barging when they see one as they know that the downfall in property prices will decrease MUCH slower as interest rates lower, as is evident everywhere ones seeks to purchase property as an inestment.

And back to topic, yes the ex-rate is hurting all ex-pats in Spain especially pensioners, as accroding to Sky News yesterday, as they can no longer afford to go out 4 or 5 times a week, instead they are down to going out 2 or 3 times a week and having to watch their shopping bills!!!!!!! Blimey back in the UK they wouldn't be able to afford to go out ONCE A MONTH and would be worried how they are going to pay for their fuel bills leave alone eat. For this I hate EVERY SINGLE GOVERMENT that has EVER come into power in the UK, as NONE have EVER helped the people who need REAL HELP!!!!!!

Instead they help the people who have never worked, never want to work and never will work!!!!!!

the tourist rate already past parity

not at all places its not you can still get 1.02 with no commission at places like the money shop and others including american express travel services at least in milton keynes you can

Good post, TechnoApe.  As you say, we're not all in it to see a fast, or even medium term, profit on our property - some are in it to enjoy their investment!  The exchange rate has, when we have needed to transfer funds into euros and/or sterling, affected us badly for the last few years.  We are now much better off exchanging our dirhams into sterling (not that we actually do), and to an extent the euro.  Where the UK had benefitted from a strong £ in recent years, we have suffered!  Now it's turned around a little for us!

We are in the fortunate position, at the moment, that we don't need a rental income from the property, but as we get to use it so rarely, we choose to rent it out, and any income is a bonus.  I feel for those who relied on the "guaranteed rental" or "sell before completion at big profit" sales pitch, but then you don't make an investment in property lightly - you have to factor in ALL scenarios.  

Dear All,

thank you everyone for your input, your information is the forum's lifeblood to my mind.

However I am not sure that we have heard from a true property investor or a currency expert.

I am not even sure that current problems are fully realised and taken into account.

Expats in Spain look to charity for basics

whats happened to the Costa del sol

Moratorium on the payment of mortgage loans In Spain. In force from December, 3rd of 2008

Living in a property having bought and not rented is no doubt something of an investment in some people's eyes, but it hardly makes one a property investor, does it?

I am not sure that buying a holiday home for oneself qualifies either?

No doubt lots of true investors were duped into buying at the end of the boom cycle, some have quickly off-loaded, some have hung on but are having difficulty paying community fees etc. Some have accepted that their investment is nothing more than a holiday home. Others have made the life-style change, moved in to offset costs. Others have let long-term for whatever they can get to offset costs.

I am not even sure that buying at a substantial discount is even a wise move, some properties are currently being offered at 50% discounts with high bank valuations and 100% mortgages.

It is all something of a gamble to my eyes, but my limited experience to date gives me little faith in bank valuations which seem to me to be no more than insurance rebuild valuations, X square meters = Y euros, and even then you have to be careful what rebuild value is placed on terraces.

One can always subsidise an investment short term for a large gain later but the longer that goes on with property the more expensive it gets.

However thank you again and good luck with your decisions and a Merry Xmas to all.

Regards

Norman

What you have to be very careful of is confusing speculators with Investors.

Many so called Investors were caught out because they believed what they were told by people who had only a smaller amount of knowledge than the actual people they were spinning it to!

A true investor will benefit from his own knowledge rather than hoping that someone else will convince them along the way........

There are some very good deals around at the minute in Spain but only if you are considering your biggest investable commodity.................your life.

This new era will clear out all the dodgy and armchair estate agents,it will also claim many more gullible casualties.

With the prices available at the moment when the rate comes back you will have people ready to take advantage of a new market ,people will always move here regardless because of the alternatives available (stay in the UK).

I agree with Tecnoape,some of my more mature neighbours are moaning that they cant eat out 2/3 nights a week anymore,they seem to forget that the reason they left the UK is because they were struggling to eat in before they came here....................!!!

I think the rate will come back in the spring time when the rest of Europe shows its hand.

Half the reason the doom and gloom is so bad and affected the pound so much in the UK is because evrybody goes on about it all the time!!!!!

My business is probably at its most precarious at this moment in time,but hey ho,you gotta take the rough with the smooth.....

What goes around come around its just the size of the roundabout that is the mystery at the minute.

Dear All,

I suppose an investor is someone who examines an opportunity and speculates on what the possibility of making a gain would be if he/she invested money and time into the opportunity. A financial or other gain being the objective and purpose.

Putting aside lifestyle gains and concentrating on financial gains what possible criticism can there be of the speculator in the property market ?

To make any gain a property investment has to be made and that in Spain is a very expensive business.

Legal and tax costs are very high as are agents commissions.

Unless there is a very strong market inflation together with a shortage of property, in that situation one can become a "contract flipper" and avoid the expense whilst still making a gain, that gain being smaller but quicker.

In the current general market that opportunity is no longer possible, except perhaps in special cases with special know-how perhaps?

However with the £'s weakness and the high Spanish mortgage rate 6+%, British buyers and indeed holiday makers are going to be very thin on the ground.

Our Xmas card this year from friends in Benidorm stated plainly that unless the £ recovered they would be returning to the UK after about 9 years. Their pensions just cannot cope with parity. I don't believe they are alone in this, otherwise the returnees would not be growing as they are.

I do not believe that this is just a cycle that will right itself or come round. I think that Britain has a lot to do before the £ strengthens again, if ever.

But where are the experts to help us understand?

We need some informed speculation on this.

Regards

Norman