The pain in Spain still falls on innocent property buyers. Why?
If Bulgaria or Dubai produced abuses against buyers, politicians would protest wildly.
But Spain gets away with abuses like these:
• an estimated 1.05m new homes completed or nearly built across Spain, but without buyers. About 50% are holiday homes on the Costas;
• some banks have refused to honour bank guarantees placed in escrow-type deposits by foreign buyers, even after developers have gone bust;
• at Chiclana in Andalucia, 2,292 homes are scheduled for demolition because they were built illegally on land designated as open space;
• in Valencia region, a few "land grab" compulsory purchases of holiday homes still occur (called by one MEP “the Mugabe school of land redistribution");
• the government’s house price index is openly ridiculed in the property industry for its allegedly inaccurate statistics;
• properties in some illegally-built developments scheduled for demolition have been advertised for sale with no reference to their condemned status.
Over recent years these abuses have affected thousands of British owners and even more worldwide.
Few politicians have campaigned on behalf of wronged owners; Labour MEP Michael Cashman has done so, consistently, while UKIP MEP Martha Andreasen is now joining in. Very few Westminster MPs have raised the subject although many – probably the majority – have constituents who have suffered.
Add to these problems the wider recessionary figures emerging from Spain and you can see why many regard it as the economic basket case of western Europe – perhaps outdoing Greece:
• new mortgage lending down 51% by volume and 59% by value from 2006 according to website Spanish Property Insight;
• unemployment across Spain averaging 19.5% but rising to 23% for 18-25 year olds – although government jobless figures are, remarkably, widely regarded as unreliable;
• the Spanish economy shrank 0.1% in the last quarter of 2009, making it the last major country to still be in recession;
• the IMF predicts Spain’s economy to shrink a further 0.6% in 2010 (on top of the 3.6% fall last year).
Some estate agents and developers active in Spain, a few with well-fuelled PR campaigns, reject this. A popular tactic is to blame ill-informed or lazy buyers for failing to do due diligence, thus hitting planning problems with builders or councils after they buy.
Perhaps. But if the same occurred in the UK there would be campaigns to change laws and curb powers to prevent those buyers finding themselves in trouble.
Why isn’t Spain doing the same? And why aren’t we complaining about those Britons caught in this mess?
If you would like to to comment on this article, click HERE to e-mail Graham.