Spanish property - Negative Equity

zzzLazyDaisy

As someone else has said, you really need to be looking at filling the voids. There is a significant number of retired people who go abroad for the winter months, so this could be a good pool for you to target. Granted you won't get the rents that you do in the summer, but you should still be able to make a significant contribution towards the mortgage repayments.

Just a thought, are you on interest only? If not, it might be worth considering to narrow the gap between rental income and mortgage repayments

ThrowingStonesAtYou

HAMISH_MCTAVISH wrote: »

The UK built just 150,000 to 200,000 per year, for a population of 60 million people, that is now growing by 400,000 people per year, and we only built 80,000 last year.

Since the average population per household in the UK is 2.36, building houses at a ratio of 1 for every 2 new people in the UK means there will be excess supply. Cheap houses here we come. :beer:

HAMISH_MCTAVISH

ThrowingStonesAtYou wrote: »

Since the average population per household in the UK is 2.36, building houses at a ratio of 1 for every 2 new people in the UK means there will be excess supply. Cheap houses here we come. :beer:

Nice try.

But household growth is currently 250,000 per year.

Even if population stopped growing, old people stopped living longer, and nobody moved here, you'd need to build 30,000 houses per year just to keep up with the increase in single person households through divorce, kids moving out, etc.

:beer:

ThrowingStonesAtYou

HAMISH_MCTAVISH wrote: »

Nice try.

But household growth is currently 250,000 per year.

Even if population stopped growing, old people stopped living longer, and nobody moved here, you'd need to build 30,000 houses per year just to keep up with the increase in single person households through divorce, kids moving out, etc.

:beer:

By what measure is household growth 250k a year? How can household growth increase by a bigger number than the number of houses :think:

hearts

HAMISH_MCTAVISH wrote: »

I'm quite bullish on UK property as there is such a huge supply shortage both today and in the future versus our actual needs. The markets will always find a way to translate such a huge needs imbalance into effective demand.

However that does not apply to all markets, such as Spain and Ireland.

I have seen it posted elsewhere that Ireland built 70,000 houses a year over the last 10 years. For a population of just 4 million people.

The UK built just 150,000 to 200,000 per year, for a population of 60 million people, that is now growing by 400,000 people per year, and we only built 80,000 last year.

And from what I have read, Spain built the most of anyone in Europe. Mostly as holiday homes, so their market is flooded beyond belief.

I can't see Spain recovering to peak levels in any less than 5-10 years, and possibly much longer. It really does depend on Europe Wide economic stability, and I'd have to guess that people will want/need their own property markets to recover before they are in a position to buy in Spain.

It's not your primary home, so if you can't achieve more revenue somehow from rental, either longer periods or higher rates, or if there are no realistic prospects of your other income increasing substantially over the next few years to ease your situation, I'd sell and bite the bullet on the loss.

Completely agree with this analysis. Although I would add, location could be a deciding factor on whethere to sell or not. Some places are never going to recover their value, having been built in locations that are destined to become ghost towns. However, others may recover in the longer term. I would almost agree with Hamish on the timescale but I would reckon that you are looking at 10 years plus. These "booms" in holiday homes were built on the rising property prices here and the easy availabilty of credit. Neither of these conditions now remain and are unlikely to retrun any time soon.

purch

I'm quite bullish on UK property

What ????? :eek:

CloudCuckooLand

I'm not sure you can rely too heavily on divorce in your list of reasons for increased household numbers.

Plenty of people are just co-habiting, never getting married or leaving it late, so divorce rates are less important than they used to be.

Plus, with the goldfish mentality nowadays, those relationships which do break-up are replaced pretty quickly. Evidenced on other forums, with regular pleas for help along the lines of; "my ex won't sell to me and my b/f" or "I can't afford to buy ex out, but need to set up home with new partner now our own child is on the way, so we need a third bedroom" etc etc.

Yes, there are transition periods, but its often musical houses to go with the musical relationships, imo.

HAMISH_MCTAVISH

ThrowingStonesAtYou wrote: »

By what measure is household growth 250k a year? How can household growth increase by a bigger number than the number of houses :think:

Seriously, have you been completely ignoring the last gazillion threads on this subject? Apparently, I post dozens of threads a day, all repeating the exact same statistic.

Yet you missed it. How bizarre....:rolleyes:

The 250,000 is from ONS, and reported in the July Nationwide housing market report.

Because there is, and always has been, a margin of vacant stock in the UK housing market. However that margin is being squeezed now.

The number of houses available for sale has decreased from 1.1 million to only 640,000 over the last 3 years. Note that RICS are also reporting the number of houses available for rent is now decreasing, and therefore rents will rise, but the housing stock for sale is still not increasing.

So where have the houses gone?:think:

ThrowingStonesAtYou

HAMISH_MCTAVISH wrote: »

Seriously, have you been completely ignoring the last gazillion threads on this subject? Apparently, I post dozens of threads a day, all repeating the exact same statistic.

Yet you missed it. How bizarre....:rolleyes:

The 250,000 is from ONS, and reported in the July Nationwide housing market report.

Because there is, and always has been, a margin of vacant stock in the UK housing market. However that margin is being squeezed now.

The number of houses available for sale has decreased from 1.1 million to only 640,000 over the last 3 years. Note that RICS are also reporting the number of houses available for rent is now decreasing, and therefore rents will rise, but the housing stock for sale is still not increasing.

So where have the houses gone?:think:

Firstly I apologise for not having all your delightful threads, I shall make it my new year's resolution to do so.

Secondly if household growth is increasing at such a significantly greater rate than the number of required houses at the current household poulation of 2.3, then it can only be assumed that the household population average is falling. If this is the case, then there will be fewer people to pay towards the cost of each home, hence prices logically should fall as a consequence. Particularly since once the supply of divorcing baby boomers who gained from the boom runs out and most of the divorces start originating from the subsequent (poorer) generation.

Spitroast

leveller2911 wrote: »

weve seen the end of cheap flights from the UK

RyanAir currently have return flights Bristol-Malaga for £20 inc taxes for anyone thinking it's the end of cheap flights from the UK.

Thanks all for your comments. I'm on repayment mortgage, never liked the idea of just paying interest, but I think it will be the right move for a while with my current situation. The mortgage lenders in Spain are not as open to change/options as in the UK but will certainly see what they say.

I have the place rented out until end March, will see if I can increase the return on the rest of the year. Mostly been renting to friends at discount prices, so will start off by putting a stop to that.