Panic is starting to set in amongst the Spanish Expat community with many desperate to sell their properties, cut their losses and make a quick exit back to the UK.
The ongoing Euro crisis and the uncertainty rife within the Spanish economy have left thousands of expats in Spain fearing that their dream homes will be repossessed. Many expats are struggling to pay their mortgages and are being targeted by desperate banks who are calling in their debts. Any Expats who are struggling to pay their mortgage are being seen as a prime target for repossession due to them being perceived as higher risks then native Spaniards. To avoid this threat, many homeowners who have fallen well behind with their monthly bills are simply handing back the keys and exchange what cash they have into pounds before the banks can act.
A combination of plunging property prices, poor UK savings rates and an exchange rate that is lower than when many expats bought their property have left many close to financial ruin.
The property boom in the early 2000’s saw an estimated 750,000 Britons move abroad and buy their new homes in the sun, many moved for health reasons, retirement or just to escape the UKs foul weather. At the height of the boom many bought new build villas, apartments and houses often with the plan to rent them out to holidaymakers. Mortgages were cheap and easily attainable with Spanish banks like Banco and Bankia eager to take British money.
Then the global financial crisis struck, wiping millions of Euros from the Spanish economy and sending unemployment soaring skyward. Many Expats found themselves jobless, their savings close to worthless and the value of their property slashed. Things have been tough for a while but now with fears that Spain is close to the brink with many of the 400,000 expats living in the country looking to escape and return to the UK. Those who can’t are searching to find cheaper mortgage options but this is unlikely.
‘Spanish banks will find any excuse not to lend,’ says Fiona Watts, managing director at International Private Finance, and she goes on to say ‘Mortgage lending has fallen off a cliff edge because the banks don’t want to take on each others’ bad debts. Lots of Spanish banks wanted a piece of the action during the boom years, but many have had their fingers burnt’.
Foreign exchange firms and financial advisors have seen a sharp increase in the number of calls from scared Britons in the economically ravaged nations of Italy, Greece, Spain and other troubled nations. Some firms have changed over £150 million from Euros to sterling in the space of a month. The number of Euros being exchanged has shot up since the first Greek monetary bailout in 2010 and the figure has only been increasing as the crisis rolls on.
Part of the sudden surge is due to recent rises in the value of the pound against the Euro. Switching €20,000 from Euros to pounds in May 2011 would have given you £17,551; today, you get just £16,037.
Those who are desperate to sale and convert their cash before the rate gets even worse should contact TorFX via http://www.torfx.com