Relocation to Spain Experience

[Martynt74]

*Snip*

Completely agree. Whilst Spain has improved a lot with estate agents being regulated now, i've heard horror stories of certain agents spending time and effort just finding loop holes to get around them rather than actually complying! We've spoken to loads and feel fairly comfortable with the ones we have and the developer is a fairly small guy who only builds 4-5 houses a year rather than promising the earth and seems to have a great local reputation. However i agree, independent legal advice will be a must.


Am also debating a second car. Something cheap and barge like. I've my eye on a Jaguar X Type. Probably an absolutely terrible idea compared to something lower end, but they look great and would be super comfy for any driving we do around Spain.
Something like this!
Ignore the mileage, it's par for the course here!

https://www.coches.net/jaguar-xtype-diesel-2006-en-valencia-55375932-covo.aspx

 

[Martynt74]

Ok, so had a meeting with the developer. It seems that my initial hopes that he would be able to buy a plot of land on our behalf, add on the build fees and then end up at a final figure which we could mortgage were foolish. Seems that because we want to build on "Rustic" land. The bank pretty much value it as worthless and so would only base a mortgage on the build price.

The upside being that he's adjusted the floorplan of one house we liked for another client which works much better for us and means no architect adjustment fees.

Given that a plot of land of sufficient size to build on is around €70-80k. That means a hefty knock on our deposit. The positive being that if we don't complete until November 24, then it's around 12 months of potential additional savings, the biggest benefit being that for every £1 we save, we can then borrow an extra £2.

I've made a few Excel models, but also have been drinking for a few hours and am potentially now just making numbers do what i want them to do (i'm an accountant after all!). They suggested that there is a chance to "Overvalue" the build cost to increase mortgageable value to slightly account for the worthless land. Within reason of course.

Here are the calculations (@Mercenary Keyboard Warrior you could be useful here!). There's 3 models although i'm just including the one at 15% over.
Could someone proof check these!

Note that the reality is that, should we give up and need to sell. The eventual sales price would value the land and so there's little to no risk from our side here of ending up in negative equity due to any over valuation. We're also unlikely to end up paying 5%, probably closer to 4% if i can get a mortgage as a Spanish Tax Resident which seems likely by Nov 24.

EDIT - Also worth nothing that this developer has a great reputation and includes insurance for cost creep. As long as we don't deviate from the initial plan, then we pay what's been agreed at the initial stage. Also because we would buy the land up front, we would own anything on our land, so assuming the step payments were reasonable there's no risk of ending up in the terrible position as many people do. The terms i've seen so far is that the first payment is only due once foundations are laid, so the guy has sufficient capital to finance the build rather than needing everything up front.

Right. It's 12:30. I'm off to bed!

 

[Martynt74]

you mean you won't owe taxes until it is liveable - won't he require a drip feed of funds, for labour&materials during build though.
How do you protect against builder going bust, or cost/time over-run (eg inflation) .

Connecting in utilities sounds as though that will be significant cost - sceptic tank, is normal ?
Do they do a geological survey/radar of the site to check there are no problem/tough strata.

Yeah, taxes are only payable on completion, and whilst we'll need to drip feed money. It'd all be factored into the Mortgage calculation, so as long as we pay "30%" we don't need to have the full 30% sat as capital, it can be through the stepped payments.

That's where his insurance comes into it, although as mentioned as we'd be buying the land outright. We'd own the building up to each stage, so as long as the step plan for funds is agreed based on certain milestones is adhered to and we don't give in to any requests to deviate from that then we should be fine. However this is builder affiliated with an estate agency and slightly higher end than the typical one man band builder so it should mitigate the risk slightly. Not risk free, but then nothing really is when it comes to things like this. You just have to mitigate where you can.

Utilities is generally priced into the land plot. If it's pre-connected for water/electric then the land is more expensive than buying it without. Septic tanks are fairly standard though unfortunately, but that's just accepted due to us looking in remote areas.

Yeah, the builder does the survey on the land with architects to determine foundations needed etc.

 

[Martynt74]

I haven't read everything here so if you're originally a native or very specifically focused ignore me. (Or if I have read it all wrong and you're doing it already )

But if this is relatively "new" to both you and your wife, would you not consider it wiser to rent for a year? 1) build more equity up, but secondly and more importantly to make sure you actually want to be in that specific house in that specific area in that specific region? When the honeymoon time ends there might be things that pivot in importance as to what would suit your new lifestyle better?

And to echo what everyone said here, trust no one when it comes to this process, there is absolutely no shame there in ripping of a "Guiri".


But overall looks great, good to see people actually following their dreams and doing rather than talking!

Edit: my first point was based on having done the same before and jumping in to buying a place which wasn't bad but became apparent after a year or so that it wasn't going to be long long term. Luckily for me I just rented it out long term (never been back!) and bought another!

I guess in theory, however we know the general area well, and are pretty good at knowing what we do/don't like pretty quickly. Probably helps that we've never been fussed on areas or having high demands even when living in the UK. We happily bought houses in places we'd never really been to as long as the house itself was right for us.

As soon as we arrived in this area back at the start of October it's felt like home to us, and that's enough. I don't think there's anything that could be changed to suit us better. We're surrounded by mountains, the views are great, the plot is flat and the house is all on a single level (important for my wife as she's disabled). I guess because we've been coming to the area a long time and generally know what is/isn't important to us it's easier to be certain. Having this rental just cemented it to us.
I would say the only compromise is the distance from the beach, but you just don't get the kind of house we want, on the size of plot we want with close access to mountains and still get closeness to the sea without being in very specific areas or having a very big budget. Well beyond what we'd want to spend.

 

[Martynt74]

I'm a pretty cautious type, so take the following with that in mind.

You're in a different legal jurisdiction, and your expectations need checking very carefully.

A lot seems to be riding on the builder here, and your opinion of them based on what you understand of their reputation. Have you spoken with other builders to get a comparison price? What happens if they prioritise another job and that delays completion? What happens if your builder is injured/ some other terrible thing happens- does he have back-up?

They suggested you overvalue the build cost to increase mortgage value. Does that mean you've given them further contingency, and they now know that? How solid is a quoted price, and us there any legal force.

If you're paid in gbp, did you allow for some exchange rate fluctuation?

How well do you know the area you're buying in? What's it like on a wet Tuesday in January?

I'm a right misery guts, so feel free to ignore all of that!

Yeah, we're taking the reputation of the builder, but not sure what else we can do. The prices are around in line with others, perhaps a touch more expensive, but from what i've heard from speaking to people that's more down to the higher quality of the build. Using better insulation materials etc.

To add, the "builder" we're using is more of a developer who manages the whole thing. He's not a builder as such in that i don't forsee him actually lifting a finger when it comes to the build process. He's more about co-ordinating the build, working with the builders/architects/banks etc.

No, it would be over-valued on architect valuation only. My contract with him would be for the pre-agreed "build price". One of the main benefits of this guy is that from prior customers his main selling point is that the price is the price. Even when covid was going mental he still stuck to prices and swallowed the cost increases. Yes it probably means that the cost of our build is more expensive as he'll factor in more contingency, but that certainty is a big factor in decreasing risk.

I'll be paid in EUR as i'm employed by the spanish entity. The only risk of FX fluctuation is our savings. However i'm accepting the risk to keep it in GBP because the saving rates are much better.

Yeah, we know the area well enough. My parents have had a place here (or nearby at least) for 25years, and lived here for around the last 10. As such we've visited at various times of the year. We know how cold it can get in January/February. It's a big factor in favouring a new build as it would be built much more efficiently than traditional builds and therefore retain heat in colder months much, much better.

 

[Martynt74]

I would certainly say that between my wife and i we're fairly good at being grounded and factoring everything in. Althoug I'll happily admit i can get giddy and carried away such as speccing up £10k home automation installations and £5k dream speakers for my music room

Luckily my wife reigns me in by reminding me that we also need more important things such as sofas and beds

 

[Martynt74]

IMO line up Nick Knowles

Did suggest a sob story due to my wifes disability and seeing if someone would just build us a house....."Yep, she definitely needs that massive home cinema"

 

[Martynt74]

Only quickly skimmed the numbers but look right on a first glance.

My only other comment to add in regards the build, having been a little burned in the UK property market development side personally (crowd funded type loans I was part of)
My experience is that if a developer goes bust then finding a new one to take over a part completed project is difficult. They tend to really want to secure a decent profit as well, and they know that taking on a part completed project can be a real pain. (they may quibble over if stuff is to spec etc)
What is the sign off like in regards local council etc. Do they need to sign off at plenty of stages?
If not can you find a way to, and agree a methodology to, check all is up to spec etc.

My experience of Spanish building is now old and out of date probably. But it used to be very foreign (pun intended) with quite different methods, materials etc and as such would be difficult for a Brit to be sure what was happening looked correct.

Cheers, i did spend quite a while on it, although it was gone midnight at that stage!

It's a fair point on the developer going bust, but i think that's always going to be a risk regardless of builder, you just have to do as much due diligence as possible and take as many steps as you can to minimise risk. This guy has a great local reputation which seems important to me and this comes from a few different nationalities, and also a few keyholder/home maintenance guys i've spoken to along with multiple estate agents. They all think highly of him and him having his own office where you can visit him in person helps, especially since his English is fairly good. Although he struggles with my wife and I being northerners!
I know the office adds more overheads which we're ultimately paying for, but again it's a small cost for minimised risk. He also said he had an insurance policy which covers his side of the build in the event of going bust. I need to see more details of that, but again seems safe.

Yes, there are regular site visits for sign offs. Especially as it's a self build mortgage so the bank get involved too.


I think whilst there are lots of historic negative stories of builders in Spain, from what i can gather, these are usually big developers who want to throw up loads of shoddy houses/flats and then move onto the next project. It doesn't feel like this guy is on that level.
Yeah, materials are different, although this is another pro of going with a new build. The house we're currently in has me sat in a hoody at my desk even when it's 24C and sunny outside. It just doesn't retain any heat and gets freakishly cold. Having a new build with insulated concrete blocks and higher quality glass to keep out sunlight yet still retain heat in cooler months is a big plus.
The pool on the house we visited had a solar heated pool. The water was like a jacuzzi!

 

[Martynt74]

Thank you for writing up your experience... I don't expect I'll ever do anything similar but it's cool that people are writing up their experiences.

No worries, if anything it's as much for me to be able to read back on in the future!

Had a few meetings with local builders to get an idea of other options which are potentially finished builds.

Yesterday met with an agent selling some, they seem to be one of the bigger agents in the area and sell on behalf of multiple builders. The first house we saw was a little underwhelming. The second was a little bigger on a fantastic plot. It was elevated on the corner of a "shelf" so nothing would block the views in front. Unfortunately there were a few houses quite closeby which ruined the feel a bit. The builder also throws up a lot of quite american looking houses quite cheap (see link https://www.alicantedreamhomes.com/...o/new-build-villa-s-with-wow-factor-7282.html). As such it feels really bizarre and not "Spanish" if that makes sense.

Today was another builder. The agent advised that this guy was cheaper than the one we'd previously met with, but has he owns a lot of the plots you would buy the whole package rather than buy a plot and build on it. It's also over the border in Murcia and as such you only need 5000m2 to build on. As such mortgage terms would be slightly more favourable. Whilst the house isn't built as well, it's reflected in the price and we saw a very nice house (perhaps a touch small) which was €280k including a double garage and on a superb plot that had incredible unspoilt mountain views. This builder also fits network points (sometimes multiple) in every room which was a nice thing to see. The slight downside was that the build was slightly advanced and they'd tiled the pool in the standard blue mosaic that we had aimed to avoid. Not a deal breaker but something to bear in mind.
Buying something cheaper is something we discussed a long time ago. Having a smaller mortgage and not having pressure on my wife to work would relieve some stress, although we could probably cope without her salary either way. However i think that pushing ourselves a bit now to get "everything" is the right choice. In theory it should be our last house and i don't see any reasons to move as long as we get it right.

He then took us to another house. This one was fairly remote and up at €330k (Link - Note the link seems to include pictures of 2 similar builds. We saw the one with the infinity style pool) However it was a step up in size. The negatives were the steps up to the front door and the fact it was crazy windy today which ruined the tranquility. I also decided it was probably a little too distant from anywhere.

We then got taken to one he was obviously quite excited about.

Villa in Macisvenda - New build - Alicante Dream Homes

Amazing new villa with pool in Macisvenda. This amazing villa with pool and garage is located in Macisvenda, 15 km from Fortuna where you find the thermal baths. Surrounded by a natural environment, almond trees and mountain views. The villa comprises a very large dining room with pool and...

www.alicantedreamhomes.com

Pulling up, it was a little odd. He had tiled the outside of the house and it was maybe a little "too" modern for our tastes. Although well finished. We then got lead to a ramp to the underground basement. This thing was HUGE. Effectively it has this room twice. Probably around 140m2

We then went up through the front door and this thing was incredible inside. Each bedroom was a great side. The kitchen was well specced including one of those hobs with built in extractor. Sensors already in the walls for motion sensing lights. Network ports galore and electric shutters on all windows that could be integrated into google. The windows also felt incredibly well built.
The bathrooms had been clad in aluminium sheets in silver and copper. I thought they looked great but my wife was less convinced.

The pool area was also great with an outside toilet which was a nice touch. The only negatives are that there was an electric pole on the corner of the plot and one of the cables drooped down over the corner of the plot. This is the Spanish countryside so it's always a risk, but it would be better to avoid. The plot was also lowish down on the hill and so felt overlooked from the house up the hill. Would be fine in time when trees grew, but that could be years.

Price was €330k which felt a great price considering what was included. It sounds like it was the builder being "experimental" with a few ideas such as the home automation and underbuild which is very rare here unless you are doing it because the plot requires it. It was also a step up in quality from what he usually builds so was in effect his "showpiece". As such i imagine he's on a slightly lower margin with it.
If it was on a better plot but for sale at €350k i'd have snapped his hand off. Sadly it just gives us something to think about.

 

[Martynt74]

Oh man. I never even thought about a bowling alley!

Also had an email from the initial builder to say his contact at the bank would provide a mortgage for 50% of the plot. This is a huge bonus for us. I've asked him how much an underbuild like the above would be vs an external garage

 

[Martynt74]

Interesting thought as i pore over my spreadsheet for a further night adjusting minor things. Spot the cool accountant over here guys! At least i have an evening cocktail in hand.

I’m currently earning around £600/mth on the cash i have in savings.
Rent. In this very very nice villa is only €1250 or £1100. Which means it’s only costing me £500/month.
I have zero maintenance costs or things to do around the house and so free time is exactly that. If anything goes wrong, i just ring a guy who comes and fixes it.

Does this mean that renting is actually the way forward! Especially given my savings capabilities with such low outgoings and no unexpected expenses wiping things out, mean i can continue to build these savings by ~£2500/mth

Assuming my mortgage ends up around €1600/mth, i would expect around €1000 of that to be interest (the true cost). Meaning that owning a home would cost around double that of renting. Along with the additional maintenance bills. The benefits obviously being that we'll never feel completely "at home" here and there are compromises that we're making by being in rented accommodation.

I know that at some point that swing shifts further into the life of the mortgage, and there's no guarantee of 5% interest rates forever. It's tempting to just stay here a while though!

 

[Martynt74]

Pretty much this, ex-mayor of where I live is in prison for 3 years for rampant fraud.

Yep. I was looking at a house and was told I couldn’t put a shed on the plot I was interested in because the local mayor was also in prison and there was a huge backlog investigating prior approvals.

 

[Martynt74]

This week has pretty much cemented us going for a new build, unless we can find a resale which has been built in the last few years and we can see the building documents.

It's down to 10C outside now and not too bad if you're in the sun, however in my current office it's absolutely freezing. The AC units will heat too, but the house just loses the heat as quick as you can warm it up it seems. From one build, it's literally just a single skin brick wall with render on the outside and plaster on the inside. Even the worst of new builds will at least have insulation on the internal side of a single skin brickwork.

I question how much worse it'll get over the next few months!


Saturday we went to view a plot. The agent mentioned they'd sold a house to a woman years ago, and because she didn't want any neighbours, she proceeded to buy up all the available plots around her. She then sold up and moved back to the UK but still owns this land. We checked it out and love where it is, however it's 50,000m2

 

[Martynt74]

How much electricity(gas) are you getting through - do they have any attractive TOU tarifs like UK , or, you can't really change renting.

Honestly i'm not sure, the owners were meant to send me an invoice at the end of October but not seen anything yet.

Central heating seems to be powered by butane bottles, but we've not worked out how to use that! Currently have a fire on but it doesn't reach my office.

 

[Martynt74]

Ever have those moments where you think, "**** me i'm a genius"?

If i was to buy the 50,000m2 plot mentioned about, we could then buy something like this to put on the plot. Then either live it in during the build and rent it out, or keep it for ourselves and no longer need to build a garage for my home office

Casa de madera para vivir PREMIUM (Aislada PLUS, 34 mm + revestimiento), 10.5x4.5 m, 47 m²

Casa de madera para vivir PREMIUM (Aislada PLUS, 34 mm + revestimiento), 10.5x4.5 m, 47 m² | Nuestra preciosa casa de jardín PREMIUM es muy apreciada por los cl

www.pineca.es

The rent over ~12-18 months wouldn't be far off covering the cost of the unit, and then once the house is finished it would be a decent rental income.

They do also do a nicer option which is a bit bigger and much better insulated.

 

[Martynt74]

Hang on, what? Have you got a couple of million in the bank or something?

Haha I wish, but have around £130k from the house sale.

Santander offer 5.25% and it’s paid monthly.

I have 85k in that and then the rest in Chip which is 4.75%

 

[Martynt74]

Nice, you're lucky if you get get 2.8% here!

Oh yeah. Same in Spain. I think N26 gives 2.25%

I’ve taken the risk to leave the cash in the UK earning interest although not sure if that’ll bite me given the EUR/GBP pairing isn’t moving in the right directing!
I’m just hoping it moves less than the corresponding interest rates.

 

[Martynt74]

Just keep an eye on getting taxed on it as global "earnings"

I still have 9k in my UK bank that I should probably move at some point.

Ooh yeah good point. Hadn't even thought of that.

Got a response on the land for sale. It's actually (only) 40,000m2 rather than 50 as i'd thought. It's split into 3 plots.

19800
5000
15000

If we took the big one it'd be around €2.50/m2, but if buying it all would come down to €2/m2 so around £80k. Its a pretty great price considering what some other plots are going for. There's another builder we're meeting today who's just bought a pile of plots not far from where we currently are, planning is all approved for them and whilst they're priced at the upper end of build prices, it'll be interesting to have a chat if it means we're in by next Summer. Either way i think we should have a decision one way or another soon.

 

[Martynt74]

I would have to ramp up my self control if I moved to Spain, from my Camino 2019 not sure if still this cheap ?

Yeah, wine is cheap, although my wife is more discerning than me and whilst i will enjoy nice wine a lot more, i'll also drink anything (current glass included). The local Bodega is very good though. It's not cheap but the wine is as good as any i've tasted in Spain.
What was nice is that if you sign up for a running event in the UK you maybe get a bottle of water at the finish. Here i did a local 10km and got a "goodby bag". It contained a bottle of red wine

Met the builder of the house last week with the big underbuild today. He showed us another plot in a nice location he could do the same house for the same price and would only be 8 months to completion. He could also make the basement taller so i could floor/board the ceiling and not be limited on Space.
The plot was near a quarry and you could hear some noises from there and see some dust when the wind picked up. The benefits being it's close enough to town to have mains drinking water which we wouldn't get in most places. Downside being it's "only" a 9000m2 plot. This can be built on though as the town is classed as Murcia which has looser restrictions.

I think we're getting closer to a final decision now. We prefer the original builder, but that would be 15 months away for our final build. It would also be around €70k more expensive than the above which is sizeable enough to raise questions.


So today was also another day in the series of "the joys of Spanish beaurocracy". I applied for my wifes Residency appointment through a company a while back, all this time i've asked them for the forms so i can pay the taxes. They finally sent them last night and then at 11am today i get a text to say the appointment is tomorrow at midday. So i rush to the estate agents to ask them to print the forms i need to pay the fees. Then find the local bank has decided to shut so head to another town. Then one bank (BBVA) doesn't do it on that day so go to another (Sabadell). Wait in a queue for 30 minutes whilst the single teller deals with a women. Then get asked for my NIE. This is a "foreigner ID number" and is used for most things. I know the number which is usually enough, but on this occasion i need the piece of paper so they can take a photocopy.
I say i'll go home and get it, however it's now 1:30 and they stop accepting cash at 2pm. He asked if i knew anyone who could pay on my behalf and looked towards another customer, but my Spanish isn't at that level yet! So now tomorrow i hope i can get it paid and we get my wifes Residency. That's a huge step forward as she can then register for the doctors and start to be tested for disability parking badge.

 

[Martynt74]

hehe . i know just wanted to go over there relax next to the pool with my cans of mercadona clasica cheapo lager ,of course that never happened , i dug a huge 20x15 hole in the ground that is virtually concrete only for the local inspector to say fill it in this is a national park , nazi wouldnt even take a bribe.

Absolutely wounded that no bribe was an option! 16 acres is a heck of a lot of land. I thought we were buying a lot at ~10! Sounds like my ideal place though! My plan is to get olive/almond trees and then get a local farmer to attend to them. Best of both worlds