A cave in spain for Christmas

They're chic, cheerful - and very cheap. No wonder Britons are flocking to the cave homes of Andalusia. Anthony Jeffries reports

'We've heard all the comments about Flintstones and dinosaurs and cavemen with clubs," says Iain Macdonald, sitting outside his home in the wilds of southern Spain. "But to be honest, if we weren't part of the 'community', I'd probably be making them myself."

This "community", which serves as the butt of so many jokes, is both old and young at the same time. Old, because we're talking about people who live in the earliest homes known to man. Young, because until a few years ago, this was a way of life which had all but disappeared.

These are the new cave dwellers of northern Andalusía: a group of people who have made the move to Spain, but who turned their back on the Costas and headed deep inland and deep underground.

It's a lifestyle which has long been familiar in the area around the town of Huéscar and the nearby villages of Galera and Orce. This is the altiplano, the high plain north of Granada, hemmed in by three mountain ranges and subject to extremes of heat in summer and cold in winter.

So why would anyone want to live here - and why would they choose a cave?

Cost is a compelling reason. For hundreds of years, the locals burrowed into hillsides all over the region, digging out the soft layers between hard sandstone strata and using the tougher stuff as watertight roofing. It didn't cost anything, and when you needed an extra room, you just dug one out.

But caves came with a social stigma. These were the refuges of gypsies and the poor, and while thousands of families across Granada province lived in cave houses as recently as the 1960s, they escaped to more conventional housing as Franco's regime tottered and the region became more prosperous.

Five or six years ago, Spaniards began buying old caves and reforming them as holiday homes. Cave hotels followed and - in their wake - the first wave of British and French troglodytes arrived in 2002.

The locals were only too happy to sell off their old caves for a couple of thousand euros, but soon "wised up". As Iain Macdonald says: "Not long ago, you could win a cave in a game of cards, or, if you bought one, the owner would throw in a second cave free. Nowadays, the locals know they have sought-after commodities."

Even so, an unreformed cave is still a good buy at anything from £12,000 upwards. Turning it into a modern, habitable hole in the ground can cost as little as £10,000 or as much as £70,000, depending on the proximity of services and the size of the property.

Iain and his partner, Gayle Hartley, went the DIY route. They moved from Newcastle-upon-Tyne just over two years ago, living with their then two-year-old son, Joshua, in a caravan while they renovated their cave in the hamlet of Fuente Nueva, near Orce.

"People thought we were mad," says Gayle. "They were convinced caves were wet and dirty and that we wouldn't be able to live a normal life. They couldn't be more wrong, though. We have mains drainage and sewage, mains electricity, satellite television and even a broadband internet connection."

Their nine-room cave certainly has a finished - if rustic - feel to it: tiled floors throughout, rough-plastered walls, a tiled bathroom and a fully-equipped kitchen. But what about the lack of light?

"We have windows at the front but, of course, the rooms further back have no natural light," Gayle says. "You don't miss it, though. I like to think of it as a bungalow without a back door."

And the weather? "Caves have a constant temperature of 16C-19C," says Iain. "They're cool in summer and escape the winter cold, when it can drop to -15C on the altiplano. You need some form of heating, but most caves - ours included - have wood-burning stoves, which is more than enough."

Cueva Esperanza (Cave of Hope), as they have called their new dwelling, is built into the hillside, but the trend is for reformed caves to have rooms added on at the front.

Karen and Malcolm MacManus, who live on the edge of Huéscar, have gone one step further: they have a family-size swimming pool on the large, enclosed terrace in front of their house.

"We moved to Spain five years ago, to the Costa Calida," Karen says. "But it was too 'British' there and we've moved four times since, trying to get away from those influences. We came to Spain to be part of the culture."

In their case, that includes the gitano, or gypsy culture. The MacManuses and their daughter, Lauren, live in an area where caves are being renovated for selling to foreigners alongside others still occupied by gipsy families.

"The Spanish don't have a good word for them, but we have found the gitanos to be really good neighbours and the children are always polite and friendly," Karen says. "They come and play in the pool with Lauren all summer long. It's a great way of integrating."

The MacManuses bought their seven-room cave unrenovated and, with an additional three rooms at the front, the pool and two terraces, their total bill was £165,000. "You couldn't buy a three-bedroom terrace for that back home," Karen says.

"People change their mind about cave-living once they've visited us. They see the standard and quality of life here and they're quite envious."

Estimates of the number of British troglodytes in the area vary between a couple of hundred and more than 1,000. One woman who seems to know most of them is Vanessa St John-Brown. With her partner, Robert Marshall, she has bought a cave house and, with it, half a mountain. She moved her mother in from the house on the Costa Blanca where she lived for 20 years and helped set up a website called Caves R Us which acts as an estate agency, advice forum and general information point.

"We share information a lot," she says. "As people renovate, they pick up tips and like to pass them on. It's not exact, like building a house, so people are grateful for any help they can get.

"More and more British people are moving into the area. In the past six months or so, people have stopped scoffing and started realising that cave-living is what you want it to be. Caves can be as smart and modern as you like, but one thing they're not is expensive - at the moment."

Unsustainable real estate speculation in Spain says UN

A special report investigating housing says by the United Nations says “rampant real estate speculation” in Spain is “unsustainable.”

Miloon Kothari has called for urgent government attention to resolve problems he described as, “the most serious in Europe.”

As much as 25% of the population cannot afford to buy homes and increasing interest rates are crippling householders who are paying 50-60% of their income on mortgages or rent.

On Friday he commented on the changes to the Land Law, which has instead of lowering prices by encouraging development, led to corruption in local government, proved attractive to organised crime and provoked environmental disasters along the Mediterranean coast. Criticism was harsh though of the “complete lack of understanding between the central government and the various autonomies, which leads to a considerable conflict of interest.” He also called for an end to tax breaks for property buyers which, “amount to subsidising real estate developers with public money.”
When asked about corruption at his press conference, Kothari expressed the view that Marbella “is merely the tip of the iceberg” and that the “actual situation is much worse.”

Kothari will publish his final report on housing in Spain in about three months, which will be presented both to the Spanish Government and the United Nations.

Your Spanish Property whats it worth?

Have you invested in a Spanish villa in the last few years? Do you really know what your investment is now worth? The property market in Spain has grown rapidly over the last 5 to 10 years and prices have risen to levels that have forced value investors into cheaper emerging markets. But for those that did buy in Spain, in some areas some people are starting to ask some serious questions. It's therefore, worth exploring some of the factors that influence perceived and actual market prices in further detail.

One of the enduring reasons why Spain remains an first choice destination for holiday-makers, property investors and would-be residents is that the fundamentals that attract people never seem to change. There's the weather with at least 300 days of sunshine annually along the Southern Spanish coastline; Spain remains cheaply accessible from most of Europe especially the UK; it's certainly alot cheaper in real terms; the people are generally accepting of foreigners and speak reasonable English; there's considerable infrastructure for foreigners; taxes are lower; petrol is cheaper. It's no wonder why so many people have invested in Spain. But for those who bought in the last few years when clearly the market has slowed, it's worth asking just what is the true value of some of those properties.

The value of any property is usually only a concern should you need to sell it. Long-term residents and retirees need read no further. But let's suppose you bought a villa 3 years ago for 500,000 Euros and you paid an additional 7% IVA (Spanish VAT) and another 3% to 4% in notary, land registry and mortgage set-up fees. Your total outlay before you've purchased furniture and completed the garden landscaping is already around 550,000 to 560,000 Euros - 10 to 12% above the 'market' price you paid at the time. (Incidentally, if you had purchased your plot outright prior to your build you would have paid 16% IVA on the plot alone and then 7% on the construction). If you still had to purchase furniture and complete your garden, you could easily find yourself at the 600,000 Euro level before you've acquired your title deeds (escritura) at the notary.

So you need to sell your villa and your investment now stands 20% higher than your purchase price. The latter point is not at all unusual especially with new build property. The general consensus is that prices have risen in the last 3 years which is true to a point but certainly not across the whole market. Indeed, the market for larger properties and especially top-end luxury villas has been difficult for a considerable period and here there has been little, if any, price appreciation in real terms over the last 3 years.

At the time of writing (December 2006) the market is quite simply over-saturated with large detached villas with few buyers in the market for properties over 500,000 Euros. There is a danger in thinking that demand and supply in the Spanish property market is sensitive to the same factors that influence that in the UK. Further analysis reveals that they are quite different.

Firstly, people buy property in the UK for largely different reasons than in Spain. Work and family considerations, affordability, area popularity, proximity to good schools and hospitals and local crime rates generally drive public demand while in Spain, many properties are purchased purely as holiday homes or investments where many of these factors are not as relevant.

Secondly, population densities are much higher and people themselves are less transient in the UK. This naturally keeps people in the same areas for longer and provides a solid basis for property prices as there are always others waiting to enter so-called 'good' areas. In Spain, there is no such pressure or demand for particular areas as the reasons for buying were different in the first place.

Thirdly, both real estate agent and bank valuations in Spain are notoriously inaccurate. In the UK, advanced systems exist showing property prices, previous sale prices and there is a generally higher level of qualification amongst surveyors. The same cannot be said in Spain where bank valuations, in particular, are often more influenced by the borrowing requirements of the buyer. Generally, Spanish mortgages are offered to non-residents up to 70% or 80% of a given property's value. For would-be buyers without sufficient funds to finance the remainder, unscrupulous agents often manipulate valuers to achieve the right valuation in order that the final loan-to-value is higher than 80%. Factor in the generally low level of expertise and qualification amongst local real estate agents and you clearly have a recipe for arbitrary pricing which in no way helps vendors understand what their properties are really worth.

Fourthly, the differing systems and application of taxation clearly impacts property prices. Spain, being a secondary property market for many people, means buyers are subject to non-resident tax rules. Capital gains tax, currently 35% (for 2006 but probably reducing to 18% in 2007), must be paid to the Spanish exchequer on disposal (although in practice this rarely happens).

Fifthly, real estate agent commissions are generally higher in Spain with standard rates between 3% and 5% even rising to 10% or more in some areas. There is furthermore, the effect of exchange rates, for if you purchased selling pounds and buying Euros at a good rate and then sold when the exchange rate was less favourable, you would no doubt lose some of your gain (if there was any).

We are unfortunately at a point in the Spanish property market when distressed sellers, in particular, are having to seriously 'undervalue' their properties to achieve a sale. There still exists a predominant culture of greed and hearsay where vendors' perception of their property's true value is overly optimistic and ultimately, unrealistic. Many are now having to face the fact that they bought badly in the first place and the additional cost of buying, coupled with the costs and taxes payable on disposal negate any margin of profit that there might be. Many are even looking at losses.

Overall, with slower demand for larger Spanish properties, a growing supply of properties for sale in the resale market, many vendors are slowly coming to terms with the fact that their ultimate sale price is considerably lower than that that was initially advertised. It is, after all, only actual sales prices that give us the truest indicator of real property values.