Spanish SunshineI love Spanish sunshine and at the end of August (and through the start of September) I went to visit some friends in Spain. The main reason for going was the marriage of one of my pals to a 'local' girl. She and her family are from Birmingham, England. The area they live in is near the Costa Blanca, about 40km south of Alicante. All in all, it is a nice area. The temperature alternates between hot and furnace. Sometimes, they have clouds to break up the monotonous clear blue sky. There are both coast and mountains nearby. There are, however, some downsides to the area. Firstly, the town in which they live is almost entirely populated by Brits. The town has some 20,000 homes and from my understanding, about 90% are owned by British people. The other owners are mostly either Irish or Dutch. In other words, if you want to practice your Spanish, don't try it here. These 'expats' seem to be mainly involved in one of just three occupations. They are either retired, sell property or own/work in a bar. Both of my friends are a similar age to me (so are not yet retired) and don't drink - so they sell houses. I must confess that I worry a little for the people in the area though. The expansion currently underway is enormous. Everywhere you look there are cranes in the skyline (much like Brussels in that regard) and houses being built. Almost all of these houses will continue to be sold to Brits. In some ways, that is great. So much extra expansion must mean prosperity for the local community. But what might happen if there is a genuine housing slowdown in the UK? As house values have rocketed, ordinary people who could not have afforded a second home in Spain have suddenly been in a position to buy. They have sold or remortgaged and used the funds to live the dream. Having exported our property boom, will we now also export a property slowdown? If we do, it will be especially hard on communities like this. Not only might they find their property falling in value (less of a worry for the actual residents) and their costs rising (if they have used a mortgage to finance the purchase), but potentially their incomes falling as well. A contraction in the housing market is also likely to dry up their supplies of ready buyers. This is all made worse by the lack of other possible incomes for these locals. Very few speak Spanish and none that I met spoke it fluently. It means that they work in an environment that serves only the British community. There are only so many shopkeepers and barmaids required! On the upside, the actual cost of living is very low. Most people that rent in the area seem to get a three bed, furnished detached house for about 500 euro per month. The costs of eating out (it is almost a national sport here in Belgium and I like to play) are about two thirds the cost of Brussels or half many UK prices. As you might imagine, the average heating bill is not very high (although fans and air conditioning are essential). For many of these Brits living in a quasi legal way, taxes are low too - if they pay tax deducted at source it is just 8%, everyone is expected to fill out an extra assessment form to pay more but few seem to. Social security is 12%. And, you don't seem to need to learn Spanish. In fact, an ability to speak Spanish fluently is likely to make you an outcast among the British community. More worrying ... if we do pass a property slowdown on, will we also pass it to France, Italy, Cyprus, Malta and almost every other country in the Med that has seen the British flock to the sun? We are such a generous bunch! Where does this leave us? If you are planning to move to Spain, I wouldn't let me talk you out of it. Almost everyone I met loves living there. It would be helpful to like Brits, Irish and the Dutch though (that's it - I'm moving! although again Brussels is similar). It could, of course, mean that there are property bargains to be had. If property does start to slow in the UK and that contraction is exported to these British coastal areas, you can bet there will be people trying to sell the 'holiday home' to reduce their debts. If mortgage costs in the UK continue to rise, those that borrowed in Britain to buy elsewhere will feel the pinch and an easy way to ease the debt burden will be to sell the Spanish property as it is owned free and clear. Who can say? It could all be quite a way off, or never happen at all. Either way, the wedding was excellent. * This article was published in October 2004 * To read more about related topics, please also visit:
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