More than 500,000 British people bought property in Spain during the boom years, and many now have horror stories to tell. While some have seen property values fall by up to 40%, others have ended up owning shares in unfinished developments or have even seen their dream homes demolished.
Spain's Housing Minister Beatriz Corredor is touring northern Europe to persuade buyers to return, insisting that prices are now a bargain. She claims that the widely reported problems faced by foreign buyers are a thing of the past, stating that prices were 30% higher than they should have been at the peak of the boom in 2008. However, two private sector indices reported that Spanish house prices fell in April.
Outside the Spanish embassy in London, a protest was staged by British buyers who lost their life savings. Julie Wakeman invested inheritance money in a development by one of Spain's largest builders, but the site remains empty except for four show homes, and the bank guarantee proved worthless. Caroline Kerr lost 300,000 euros (£266,000) on a property with a full bank guarantee, accusing the minister of being unaware or uninterested in the plight of buyers.
Minister Corredor insists these cases miss the bigger picture, noting that nearly one million British residents live in Spain and 23% of foreign buyers are British. She advocates transparency and has published a guide on buying safely. However, financial markets worry that Spain may follow Greece, Ireland, and Portugal in seeking a bailout, with entire developments standing empty. Potential buyers face the dilemma of whether today's prices are a bargain or if further developer bankruptcies could make them look expensive.
