The Spanish government is ruling out help for thousands of Britons who have lost money – and sometimes their homes – despite promising to overhaul its house-buying process to avoid such problems in the future.
Beatriz Corredor, the Spanish housing minister, has visited Britain to launch what she calls a "roadshow" publicising "a wide range of real estate at more accessible prices than a few years ago". She has met British pension funds and other investors to encourage them to buy some of the country's 700,000 empty new homes. Some 61% of these are holiday properties on the coast which have remained unsold for up to four years.
But while Corredor is trying to ease the pressure on her country's banks – which seized many of the empty homes when developers went into administration and now must sell them to ease their own debts – she has refused to pledge help for British victims of three Spanish property scandals in the past 10 years.
First, some developers were given permission by local authorities in coastal regions, chiefly Valencia, to demolish homes already owned by Britons thank to retrospective changes in planning rules. These are the so-called "land grabs".
Second, many thousands of coastal properties were found to have been built and sold illegally, without planning consent, because of corrupt deals between local politicians, planners, architects and developers. Some homes are to be demolished as a result while the owners of others have faced years of uncertainty over their status. As a result, they are unable to sell.
Third, since the 2007 Spanish housing market crash, many British buyers who paid deposits on new homes into "independent" bank guarantee schemes have not had their money reimbursed after the homes were abandoned by bankrupt developers. Banks have cited previously unpublicised loopholes, or in some cases simply said they could not afford to pay.
"There are 850,000 Britons living in Spain and these problems apply to fewer than 1%," says Corredor. She says compensation will be paid to Britons only "if the courts order it" – meaning those buyers unable to afford lengthy legal action, or who are unable to prosecute developers who have gone bust, stand no chance of compensation.
Campaign groups such as Spanish Banks Guarantee Petition and the Finca Parks Action Group, made up of British victims of the scandals, have branded the roadshow an insult. Protestors picketing the Spanish embassy were denied a meeting with Corredor but one victim - Keith Rule, whose £50,000 deposit was not returned to him by a bank despite his home not being built – was granted a discussion with three officials. They "asked questions, made notes and took paperwork" without guaranteeing they could resolve the problem, he says.
Corredor insists the measures she is introducing will avoid a repeat of the fiasco. In future, for the first time developers will have to provide buyers with the paperwork for building consent and planning zoning. There will also be a property register website – to be made available in English later this year – listing properties for sale with their legal status. There will be new police teams and what she calls "a special prosecutor" charged with tackling the town hall corruption that led to previous scandals. This will take the sales process to "the standard of the Royal Institution of Chartered Surveyors" claims the minister.
Her visit and presentations in London are being repeated in Germany, France, the Netherlands, Scandinavia and Russia. These are being funded by the Spanish taxpayer but Corredor promises the second phase of the roadshow "in the next two months, before the summer" will consist of "approved" developers and estate agents marketing properties at shows they will organise privately.
Although the Spanish national government h as launched this charm offensive to woo British buyers, other elements of the country's property industry are being more combative. A minister in the Andalucian regional government has accused complaining Britons of lacking respect for "the culture of planning" in Spain. Purple Cake Factory, a Spanish-based PR firm with several property clients, used its Twitter feed to call Labour MEP Michael Cashman an "idiot" for urging Britons to avoid investing in Spain until victims of planning and corruption scandals were recompensed.
With unemployment and debt problems escalating, Spain's anxiety over unsold homes is likely to increase. Whether the property roadshow will help the situation, however, is another matter – given recent events, Britons may need more convincing before they believe that buying property in Spain is as safe as houses.
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