Many British people who have invested in Spanish property are suffering since the market has collapsed. Although in other parts of Europe property markets are also rather shaky, Spain has been hit far harder than her European partners.
Due to people being unable to keep up with mortgage repayments there are also an ever-increasing quantity of second-hand properties up for sale. As well as locals being unable to keep up with monthly payments, many overseas owners are also finding paying for a second home is too much to cope with.
The problem appears to stem from that during the good “boom” years, the Spanish built far too many properties. There are currently 1.2 million homes for sale in Spain, and many of them burdened with negative equity. When things were beginning to look grim in 2006, there were around a million homes in the process of being built. A large percentage of these homes have never been completed as oversupply resulted in developers being unable to secure loans to continue work.
Many banks are advertising repossessed homes on websites, but with many local people out of work there are few signs of properties being snatched up, and with prices still free-falling this does not look likely to change in the near future.