Investment Property Spain Blog Access Spanish Property

A cave in spain for Christmas

2006-12-11T01:17:00.000Z

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."

Your Spanish Property whats it worth?

2006-12-08T10:49:00.000Z

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.

Unsustainable real estate speculation in Spain says UN

2006-12-10T13:32:00.000Z

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.

techno

2006-09-09T12:01:00.000Z

Technorati Profile

Spanish Property developer...read on

2006-10-22T14:22:00.000Z

LIKE many things in life, it seemed like a good idea at the time. Buy a flat in a traditional block in Barcelona, do it up and make a killing. How could we lose? House prices across Spain went up 12 per cent in the past year, according to government figures. In Barcelona the figure was almost double, with the price of the average home rising by a staggering 21 per cent in 2005.

Of course, many Brits, including the Times columnist Matthew Parris, have fallen in love with tumbledown wrecks in the Spanish hills and turned them into dream homes. Yet many analysts predict a gradual slowdown in the Spanish market. So going for a place like Barcelona, which still has considerable cachet and is propped up by strong domestic demand, seemed a better long-term investment. Surely the city could withstand any dip in the market? Mark Stucklin, a Spanish property expert on www.spanishpropertyinsight.com, says: “Barcelona is such a great place that, even if the prices do fall nationally in Spain, buying here will always be a good investment.”

The only snag, then, was the actual asking price. The average flat, with marvellous high ceilings, classic Spanish tiles and a balcony, costs about €500,000 (£336,600). And it is impossible to snap up a places with a gorgeous terrace overlooking the Mediterranean for less than €1 million. So the only way to get into this market seemed to buy a flat that needed doing up and make money on it later.

Among British friends who had the same idea it seemed a favourite dinner party topic of conversation. “Are you looking? Have you seen something? We’ve been looking for ages, but they are all a million euros. It’s impossible!” Undaunted, we started our hunt.

Estate agents proved useless. They didn’t listen to what we could afford or what we wanted. So, although we said we were looking for a classic old-style flat, we were shown round a succession of ultra-modern horror-show homes. My girlfriend, Lucille Papais, told them we had a budget of €500,000, only to be taunted with a palace with a price tag of €1 million. After traipsing round the umpteenth place, our morale was at rock bottom, so we decided to make our own luck by knocking on old people’s doors and asking them if they wanted to sell.

Then, when we had all but given up, we found what we were looking for. In the heart of Eixample, one of the city’s best areas, we found a classic flat with high-ceilings, old tiles on the floor and two balconies. On closer inspection, there were a few drawbacks. The flat was dark and dingy and it had uneven floors, but it had plenty of space and a nice view of a park.

We agreed that with a bit of work it could be great, so we agreed to buy it. The estate agent tried to force us to pay a fee up-front, but we knew that the seller should pay the fee, not the buyer. She also spoke very quickly, like a machinegun, perhaps in an effort to pressure us into buying. We politely told her to slow down.

Then the search began to find someone to do it up, which is just as important but perhaps even more difficult than finding a flat. If you don’t want to try to organise a small army of plumbers and architects, then you need a good project manager. Asking around through people who have done the same thing is often the best method. We chose one who promised us a good foreman and appeared to have done a decent job on other flats. His price was reasonable, so we shook on it and told our man exactly what we had in mind. We later discovered that our ideas were different from his. Our plans outlined, we waited for the work to start — and waited, and waited. After two months and plenty of excuses, they got going. There was a lot to do. The whole thing had to be gutted, the basic structure checked, and then rebuilt.

Many Britons will have found to their cost that every builder in Spain thinks foreigners are made of money. They try to steer you to their suppliers who can give you a “special deal”. This simply means a cut for them. Keen to avoid falling into this trap, we did our own research. An entire floor needed replacing so we had to find some old tiles, but it proved difficult to locate the classic tiles for which Spain is so famous because Spaniards love the new, not the old.

Very soon, things started to go awry. The floor was not levelled properly and the ceilings were too low and had to be redone. We realised that, if you do not stand over the builders every day, you are asking for trouble. Alternatively you must insist that they call you every time they are not sure about anything.

As the work proceeded at a snail’s pace, our patience started to wear thin and many sleepless nights were spent fretting over the project manager’s incompetence. At one point I even dreamt fleetingly of hiring a hit man to bump off the builder, but even if I had been serious this would have delayed the work still further.

On top of this, more things were going wrong: radiators were in the wrong place, the precious tiles were damaged, the heating didn’t work. After a series of rows we fixed our own deadline to force the builders to finish, paid them €80,000 for their efforts, bade them a less than amicable goodbye and moved in.

So was it worth the hassle? When I look out from the balcony, I think . . . of course, it was.

Tarifa the smart property choice

2006-06-20T10:33:00.000Z

The beach at the Spanish resort helps attract British buyers; A two-bed flat in the old town costs about £165,000; The town, now 'achingly cool', attracts windsurfers.

Tell them it’s a windy dump, that everyone is uptight and you can’t find a property for love or money.” From Adrienne Gabriel’s smile, it’s obvious she is joking. “Actually, life here is so good that sometimes we fret about the impact of more newcomers, of word getting out,” she explains.
Gabriel, 42, originally from South Africa, moved to Tarifa from Malibu 18 months ago with her British husband, Nick, and children Grace, 3, Alexa, 7, and Sasha, 9. The family upped sticks when Nick, 42, was headhunted by an internet company based in nearby Gibraltar. “For the kids, it was total submersion. We put them in a local school and they were speaking fluent Spanish within four months,” says Gabriel.

Tarifa is the southernmost town in Spain, and the views of Morocco, just across the Straits of Gibraltar, are spectacular. For Gabriel, who has also lived in Wandsworth, south London, proximity to the continent of her birth is appealing: “We are just 35 minutes by boat from Africa, so we can go across to Morocco for lunch.”

The only problem — and it’s a big one — is an acute shortage of properties for sale in and around Tarifa. “We’ve been househunting for a year now, but there is so little on the market and the prices are insane,” explains Gabriel.

Even with a €1m (£685,000) budget, the Gabriels have been unable to find a detached property in a semi-rural residential area that matches their requirements. “Five years ago, the three- and four-bed properties we are looking at might have cost a few hundred thousand euros; now they start at a million,” says Gabriel.

Frustrating as it is for would-be buyers like the Gabriels, the reason is obvious: in recent years, there has been very little new construction in the town, pending the approval of a new urban plan. But while developers have held back, demand for property has exploded, driven by a radical transformation in the town’s fortunes.

Once part of the hippy trail, Tarifa spent decades in the doldrums, with little local industry and beach tourism driven away by the strong winds that blow through the straits. Consequently, there was no demand for new homes, while the ancient buildings and walls of its old quarter were left to crumble.

Over time a windsurfing community put down roots, attracted by the very winds that discouraged tourists. Fantastic windsurfing, and then kitesurfing, put the town on the map as a place where surfer dude meets hippy glam.

The result is that Tarifa is now achingly cool, full of beautiful people with athletic, tanned bodies. Dreadlocks and designer brands abound, and the place even has its own style of music — a rhythmic, exotic blend of Arab, ethnic and flamenco. The only other place in Spain that can compete with it for this kind of happening, young, affluent scene is Ibiza.

Tarifa’s youthful niche appeal has attracted property buyers who feel comfortable in this environment, and who don’t mind the wind. While other Spanish coasts attract fiftysomething British couples looking for a place in the sun to make their pensions go further, the area attracts younger couples.

Georgie and Lawrence Bull moved three years ago from Rye, East Sussex. Both keen windsurfers, they met at Rye Watersports, a windsurfing centre. “Lawrence came to Tarifa years ago to windsurf, and fell in love with the place,” explains Georgie, 32.

The Bulls, who relocated with their children Sam, now 11, Oliver, 9, and Maisy, 5, and have just had a fourth baby, Lilia, started off by renting a finca, or country property. “But it was very basic, and too cold and wet in the winter, so we moved into rented accommodation in town,” says Georgie.

In 2004, they found a corner building in the attractive old quarter, which they bought for £340,000. “Fortunately, the building was already largely refurbished, so we didn’t have to undertake much building work,” explains Georgie.

Located just inside the city walls, on a street leading directly down from the beautiful old Moorish gate known as the Puerta de Jerez, the building has three floors plus a roof terrace, with views of the old town and the sea. On the ground floor, Georgie has opened Tarifa’s first organic shop, selling her own brand of natural and organic skincare products called Tarifa Green.

“It’s a great place to live,” she says. “The downside of living in the old quarter is the noise and the problems with parking, but you get used to it.”

Beth Harrison, 34, and her French- Norwegian husband, Arvid Bergvall, 36, moved to Tarifa from London three years ago. The couple have since had two children, Amélie, two, and Léa, five months.

After making several local real-estate investments, Harrison and Bergvall set up Vision Tarifa, a property consultancy specialising in well built, design-led properties. They provide an advisory service to investors, and they also rent out some unique properties around the area. Their business gives them an understanding of the forces driving the local market.

“You can’t go wrong with the old town,” says Bergvall, who trained as a solicitor in London. “There’s no solution to the shortage of attractive, historic properties within the city walls. Tarifa is now so popular, and so unique, that demand for this type of property will always be greater than supply.”

According to Cristina Aldana, an estate agent with Inmotarifa, property prices in the old town are three to four times higher than they were just five years ago, and demand from British buyers is partly responsible. A typical two-bedroom, 80sq m flat costs about £165,000, up from £90,000 two years ago.

Outside the old town there are some drab, modern districts spreading a couple of miles west down the beach. Many of the properties here are holiday flats, and prices are high. According to Aldana, a one-bed flat on the last remaining new development by the beach, La Reserva de Los Lances, costs £245,000; a two-bed is £275,000. “Despite the prices, it’s almost all sold out,” she says.

For those, like the Gabriels, who prefer to live out of town, the options are limited. Agricultural land and the park of Los Alcornocales surround the town, so there are few residential areas. Beautiful natural surroundings — wind farms notwithstanding — are a great attraction, but the lack of new residential development causes problems.

For detached properties out of town, the most desirable area is La Peña, a five-minute drive west of Tarifa, halfway down the magnificent Los Lances beach. “It’s slightly elevated here, with great views over the beach towards Morocco,” says Bergvall. “Yes, prices are high, but they compare favourably with places such as Ibiza.” Detached properties in La Peña range from about £545,000 to £1.025m.

The problem is that many of the properties around La Peña don’t have planning permission. Until a few years ago, it was quite normal to build properties here without permission, but there has been an Andalusia-wide clampdown on illegal building. The clampdown has increased the risks of buying illegal properties.

Fortunately for future buyers, the new urban plan is expected to reclassify as residential some land around La Peña, and along the beach towards the town. Plans even include a golf-course development, though golf is not what Tarifa is about.

“Everything is on standby until the new urban plan is approved,” explains Bergvall. “The plan is expected to legalise many of the properties in La Peña, and make more land available for development, to address pent-up demand.”

In the meantime, househunters like the Gabriels will have to pay the high prices and accept the risks, or sit tight until more properties are built. But hoping that Tarifa might return to obscurity is unlikely to do the trick. The word is out.

Beware of Spanish Property Lawyers

2006-10-30T10:19:00.000Z

Give a lawyer unlimited power over your affairs and you could be heading for serious trouble...

Amid the thrill of buying property in Spain, many people make too little effort to understand the “boring but important” issues involved in the conveyancing process. But as the following experiences show, you ignore unexciting questions — like whether to grant a power of attorney or complete without a first occupancy licence — at your peril.

Power of attorney

Maureen Windale moved to southern Spain with dreams of living out her twilight years in a sunny rural idyll. Windale, 68, a pensioner from Sunderland, spent €150,000 (£100,000) — most of her life savings — on a newly built bungalow with one acre of olive groves in Andalusia’s Granada province.

At first, she was delighted with her new home just outside the village of Freila, 60 miles northeast of the city of Granada, and close to the provincial border with Almeria. “I was so happy with my big bungalow and its views of mountains and lakes,” says Windale, a widow who moved alone to Spain. But seven months later she is spending the rest of her savings on legal action against the vendor, the estate agent and the lawyer. What went wrong? It turns out that Windale was duped into buying an illegal property. Her title deeds make no mention of the bungalow, and the land is significantly less than she was promised. To cap it all, she does not even own the land outright; she shares it with her neighbour and the vendor.

Windale’s big mistake was to give sweeping powers of attorney (POA) to a lawyer recommended to her by the agent. The lawyer abused these powers to buy her an illegal property that was smaller than expected. The lawyer signed all the purchase documents on her behalf, and Windale had no idea what she was getting into. In hindsight, she realises that the lawyer was in cahoots with the agent and vendor in a scheme to defraud her.

“I let my heart rule my head, and now I’m so angry with myself,” says Windale. “The vendor was English and the estate agents were English, so I felt I could trust them. When this is done to you by your own people it hurts a lot more.”

Just like Windale, many Brits on inspection trips to Spain sign a power of attorney in a hurry before flying home. For many, it is an unintelligible document in Spanish giving a lawyer they have never met before extraordinary powers to make decisions on their behalf — with big financial implications.

Buying agent Andrew Lupton, head of Stacks Relocation Spain, believes that many Brits are too flippant about granting POAs when buying property. “It’s risky giving a POA to a relative stranger,” he explains. “They are powerful documents that can be easily abused, which is why we recommend people never sign POAs unless it’s among trusted family members. And if you must sign one, make sure the powers are limited very specifically to the job in hand.”

Licence of first occupancy

Imagine buying a new home in Spain but not being able to connect to the mains. This is what happens if you complete on a new property without a licence of first occupancy (LFO), or licencia de primera ocupación in Spanish. Utility companies need to see this licence – issued by the town hall – before they can supply domestic accounts with water and electricity. But some big new developments are not receiving LFOs, often because of planning irregularities.

Jayne Arthur, 48, and husband John, 52, from London, rue the day in early 2004 when they completed without one, paying £140,000 for a two-bed flat in Mijas, near the Costa del Sol. “We have been relying on the builder’s supply for two years, and the problems have put us under a lot of strain,” says Arthur.

Developers often promise to provide water and electricity from the builder’s supply until an LFO is granted. The problem here is that the supply can be unreliable, and there is always the risk that it might be cut off. “There was a power surge on the development a few weeks ago in which many neighbours lost their air conditioning, fridges and burglar alarms,” says Arthur. “We had to pay £200 to have our air conditioning fixed, and now we’ve decided to shut down the fuse box until the utilities are connected.”

Unfortunately for the Arthurs, their lawyer used a power of attorney to complete on their behalf without ensuring that an LFO was in place. “Other buyers didn’t complete until a few weeks ago, when an LFO was granted. But because we completed two years ago we’ve had to pay more than £2,700 in community fees, rates and wealth taxes for a holiday home we couldn’t use,” seethes Arthur.

Under Spanish law you can’t be forced to complete without an LFO, but that rarely stops unscrupulous developers from putting buyers under pressure to do so. The best advice to all buyers is don’t complete without one. Having said that, in some cases it may be the most sensible thing to do.

“The lack of an LFO sets the alarm bells ringing,” explains Michael Davies, a lawyer based in Almeria. “It means you have to do more checks than normal and find out exactly why there is no LFO. Once you know what the problem is you can decide how risky it is to complete without one.”

Granada Ski and Beach combined

2006-11-29T11:38:00.000Z

The slopes and the costa are both within striking distance of this ancient town, writes Nicola Venning writes Nicola Venning

If you like to mix café society with your aprés ski and enjoy red runs as much as red wine in a good restaurant, then a home in Granada, southern Spain, could be for you.

Imposing: the glorious Alhambra is the focal point of the city and the Sierra Nevada rises up on the horizon to meet it

With two budget airlines – Ryanair and Monarch – flying regularly to Granada, this astonishing medieval city, which is home to the historic Alhambra palace, has never been more accessible or alluring.

"Granada has cachet," says Michael Harding, 55, a property investor who has bought a home in the Santa Clara golf resort three miles outside the city. "It is quality as opposed to cheap sun, Guinness and chips."

Harding paid £140,000 for a three-bedroom house with a handsome 150 square metres of floor space two and a half years ago. He estimates that it is now worth more than £190,000.

The development around it has an indoor swimming pool and gold course complete with clubhouse and is only forty minutes from the Pradollano ski resort in the Sierra Nevada in one direction and same distance from the beach on the Costa Tropical in the other. "I have many friends in Malaga who come to Granada every year to ski," says Harding.

If you would like to be closer to the slopes, you might like to consider a home in one of the pretty little villages en route to the ski station, such as Monachil, Pinos Genil or pretty Guejar Sierra, which is about half way between city and resort. Eighteen months ago, Sean Lundy, 35, a civil servant from London, bought a two-bed off-plan apartment from Granada Estates in Guejar which is due to be finished by the end of this year, for £66,000.

"We are not yet paying the mortgage and it has already appreciated," says Lundy. "I think it is now worth £76,000. The village has shops and a school – and is only 20 minutes from Granada and all its nightlife as well as 20 minutes from the skiing."

Lundy plans to use the apartment during the school holidays with his wife and son and rent it out the rest of the time. Homes close to the ski resort are few and far between and tend to be old fincas or cortijos (farm houses with land), often not in very good condition with poor access.

Paul Martin, managing director of Granada Properties, said: "When houses do become available close to the resort they tend to be very expensive usually selling for between £200,000 to £420,000 for a fairly basic two or three-bed house. It is almost impossible now to obtain planning permission to build new houses up there". More apartments are available to buy in the ski village itself. The average price for a two-bed apartment is about £100,000. The cheapest would be £30,000.

If you are something of a culture vulture and don't mind a 30-minute drive up to the resort each day, you might prefer Granada itself. For sheer atmosphere and charm you cannot beat the alluring old districts or "barrios" of the city.

In the ancient arab quarter of Albaycin and gypsy district of Sacromonte, white-washed houses hug winding medieval lanes that wend around the Alhambra. Unsurprisingly these are some of the most sought-after and expensive homes you can buy in the area. In upper Albaycin – on the top of a hill with fabulous views prices are the highest. A "Carmen" – which is a traditional Andalucian house with wooden floors, beams, a garden and a pool – would cost about £405,000, while a one-bed apartment starts from about £140,000 and could be rented out as a short-stay holiday let for £42 to £60 a night.

Barbara Wood of consultants The Property Finders, said: "You might find the skiing market for rentals in the city a bit hit and miss, unless you are close to the south side and an access point."

Happily, access will be improving though, because there are plans to link Granada by gondola to the ski station 13 miles away with proposed stops at the villages of Monachil and Purche.

Polaris World builds new town, Brits taking over?

2006-11-22T21:59:00.000Z

A giant new town due to arise out of the dry landscape of south-eastern Spain is at the centre of a battle over claims that traditional communities are being buried under a flood of golfing British expatriates and others looking for houses abroad.

With work due to start on eight golf courses and 60,000 houses, people in the country town of Alhama de Murcia are worried that their 17,000-strong community will soon be unrecognisable. A rebellion in the ruling group in the town hall has temporarily stopped some of the projects, which will increase the size of the town twelvefold.

"People are frightened," said a rebel councillor, Teresa Rodríguez, whose refusal to support her own party has temporarily blocked the plans. "It didn't seem right to me that some 120,000 people should come like that, all at once."

But, with Ms Rodríguez reportedly due to be expelled from her party, it seems likely that the new roads, waterways, golfing greens and villas will soon be built.

The row comes as Spain prays for enough winter rainfall to overcome a severe drought that started last year.

The region of Murcia has been one of the areas worst-affected by a severe drought that began last year, with environmentalists blaming water-hungry golf courses for consuming a vital resource.

The Polaris World company, which plans to build many of the new homes and three golf courses, says a private desalination plant and recycling will make its projects self-sufficient in water.

The company, which has a London office, told the Guardian that three Alhama developments where houses were already being sold "off plan" had all the permits they needed. A Socialist councillor, José Espadas, denied this.

The number of UK residents intending to buy property abroad is set to double from 5% to 10%, a recent Barclays bank survey found. A third of future buyers said they wanted a property in Spain.

My Rant

Brits have always liked the Spanish Costas and Murcia has become a favourite buying spot for many over the last few years. I remember thinking that La Torre and El Valle could add value to the area, which is dominated by farm land and industrial units. However when the other 7 resorts popped up, my feelings changed and now a new town, its a bit much. Many Polaris properties have come up for resale and are now on the market, is there really demand for 60,000 new homes, doubtful and what about the locals that cant afford these homes...