Why buy on Spain’s Costa del Sol

Ben Johnson / Bright

If you are unfamiliar with the Costa del Sol this short article is here to help you understand why so many people from Northern Europe have decide to make this fantastic location their second home. The article will also offer insight in to why this location will continue to be such a popular destination for the long term.

keywords: spain, costa del sol, property, tourism, weather, location, accessibility, health care, activities, sports, growth, potential.

Great weather

There are over 300 days of sunshine a year on the Costa del Sol and average day time temperatures during the winter months are between 16 to 22 degrees Celsius. Parts of the Costa del Sol have a microclimate; Marbella and Almunecar are two such areas due to the natural protection afforded by the mountain ranges close by.

Easy accessibility

The Costa del Sol has three international airports: Malaga, Gibraltar and Jerez de la Frontera. Regular low cost flights are available from most of Europe’s major cities and journey times are between 2 and 4 hours depending on location.

Exciting location with good amenities

The Costa del Sol is an area of coastline that’s approximately 200 kms long. There are a huge number of locations in which to have holidays or to live for longer periods. The areas of Marbella, Fuengirola, Sotogrande and Mijas have a year round tourist season and offer all the services and amenities you would expect in any northern European city. There is a huge variety of restaurants, shops, bars and night clubs available up and down the coast. The most exclusive of which are situated near Marbella and Puerto Banus.

A sound health care system

Spain has a good state health care system and is free for people from European Union member states. There is also a good private health care system available and the cost is quite reasonable. The Costa del Sol has numerous public and private hospitals and most treatments are available easily.

Political stability

Spain has a stable political climate and is a member of the European Union (EU) and in recent years has made enormous strides towards becoming a place where one can buy and sell property within a sound legal framework. The EU sets a benchmark for legal and administrative processes and also acts as the supreme legal power for court rulings.

Sound infrastructure

Spain has benefited from ten years of subsidies from the EU, over one hundred billion euros has been invested in the country. In the Costa del Sol region, new roads, rail infrastructure, telecommunications networks, and a huge range of government-sponsored initiatives for local amenities have transformed the area from an underdeveloped coastal region into the exciting and vibrant location it is today. There are further plans in process, that include major improvements to increase the regions appeal for business and tourism.

An exciting range of sports, activities and hobbies

The Costa del Sol offers a wide range sporting activities that give the area enormous appeal as a year-round holiday destination. These include all of the water sports and some of the best locations for kite surfing and wind surfing in Europe. If you prefer the mountains there is skiing in the Sierra Nevada and many beautiful locations for hill walking, climbing within the Malaga province. There are a huge number of clubs and societies to join, so whatever your interest you will find a group promoting it here with both foreign and Spanish members. Golf is a year-round tourist attraction especially during the winter months as there are an extra ordinary range of delightful courses. Some of the world’s most famous courses are located near Sotogrande.

Improved building standards and industry regulation

The Costa del Sol has perhaps the highest concentration of luxury developments and individual properties anywhere in Europe. Building standards have progressed a long way since the 80’s. Recent legislation from the EU and the Spanish Government regarding building standards and Health and Safety has improved building qualities.

Fiscal and legal help on hand

The Costa del Sol´s long history of residential tourism means that there are many Spanish and foreign companies available to help sort out legal and fiscal matters. It’s now very easy to find someone with good references to help manage your affairs who can explain the intricacies of any tax or law-related questions you may have.

Culture

Spain is a country with a long and diverse history, and Andalucia is full of interesting cities, monuments, galleries and sites of particular historic or ecological interest. There are a huge variety of places to visit that surround the Costa del Sol and Morocco and Portugal are also within a few hours drive if you want to experience something a little different.

Low crime rates

The Costa del Sol is still a very safe place to live and it is still a pleasure to see people of all ages walking in the streets late at night, unfortunately a rare sight in most other areas of Europe.

Future growth potential

Spain and particularly the Costa del Sol are similar in climate to California. It seems very likely that the coastal regions of southern Spain will experience very similar demographic shifts over the next two decades. Factors such as the large number of people approaching retirement age, good infrastructure and accessibility seem to suggest that people from northern Europe will continue to buy property over the long term. This strongly suggests continued development of the Costa del Sol’s tourism, business and real estate sectors.

January 11, 2006 | Permalink

Buying Euros to pay for your Spanish property?

Marcus Lang / HIFX

keywords: Spain, currency, transfer, rates, eurobor, euros, sterling, risk, exchange, property

When you agree to buy a Spanish property you will know the price in euros. The actual cost (in Sterling) of the property depends upon the exchange rate that you achieve to buy the euros. It may seem obvious but people are often shocked by the cost implications of a sharp move in the exchange rate. Once your offer on the property is accepted you are exposed to a currency risk until you secure a price to buy euros. If you wait until funds are actually required in Spain, the cost of the property will fluctuate on a daily basis (either become cheaper or more expensive).

Don’t take a Currency Risk.

To illustrate this we can look at an historical example: A villa priced at 400,000 euros would have cost £266,666 at the end of June 2005 but increased to £279,720 by the end of July (4.7% in just 4 weeks). This is unnecessary and easily avoided. It goes without saying that the reverse could happen and your property could become cheaper if the euro were to weaken but if you are happy with the cost at the start you would be well advised not to speculate and risk paying more.

You would not entertain speculating on currency when buying a home in the UK so why take a chance when buying in Spain!

You have several ways of buying euros. You will have to buy the deposit for the property straight away and then decide on a strategy for the balance.

• If you have all of the funds available for the balance you can buy euros straight away and hold them. You can then send funds to Spain as, and when, required.
• If your funds are tied up or you haven’t received money from a UK re-mortgage you can fix an exchange rate for all of your future payments using a forward currency contract. This means that you can buy euros now but pay for them later (you will need to pay for only 10% of the reserved currency straight away and the 90% balance each time you need to make a Euro transfer).
• You can wait and ask your currency broker to watch the rate for you. It is usually best to decide on the “worst rate” you are prepared to accept and stick to this so that if things go wrong you don’t go below a certain level. You can also establish a target price (which should be realistic and not too “greedy”).
• If you are buying in a new development you will have staged payments to make and this makes it even more vital to fix an exchange rate at the outset as your time frame is much longer.

It is a good idea to shop around when buying currency. Don’t assume that your bank will give you a good exchange rate but equally don’t assume that the cheapest broker will be best either. You need to find a broker who will offer competitive prices, offer a high level of personal service and have a robust and efficient payments team so that your money arrives safely and on time.

Don’t assume that your bank is the best solution:

Shop Around

Bright S.L. encourage you to do your own research but have found Windsor based currency brokers HIFX plc (who also have a local office in Marbella) to be very helpful, patient and efficient. They offer “value for money with great customer service”. It is also worth talking to them about sending monthly payments to Spain (for a pension transfer or to service a Spanish mortgage).

With HIFX you pay zero Spanish receipt charges.

One of the biggest headaches when sending money to Spain is the frankly ‘greedy’ and unjustified receipt fee charged by the Spanish banks. HIFX have worked hard to eliminate this cost and not only send your funds free of charge from the UK but also promise that you won’t be charged a receipt fee in Spain. Very occasionally a payment will attract a fee in which case HIFX guarantee to reimburse you the charge!

HIFX also have direct access to SWIFT, the largest global payment network, which means that they can generate a ‘Payment Confirmation’ immediately.

Regular payments to Spain

Mortgages

HIFX have also developed a regular currency service for clients sending regular funds to Spain where the transfer fee is free (which could save you £300 p/a)

Mortgages: HIFX will fix and exchange rate for up to 2 years ahead,
establish a direct debit with your UK bank and send your mortgage payments to Spain automatically. You cannot miss a mortgage payment in Spain so don’t leave it to chance.

Pensions

If you retire to Spain you can use HIFX to transfer your pension. This means you can relax as you won’t have to talk to your UK bank from Spain and, like the mortgage payments, you only have to re-establish the facility every 2 years.
It means that you can fix the amount of euros arriving in your Spanish account each month which will make budgeting easier. Call 00 441753 859159 or visit www.hifx.co.uk/rpa

HIFXplc

HIFX one of the fasted growing companies in Britain. Working with numerous agents, developers and lawyers their consultants can probably answer most your questions before you ask them but are on hand to calm your fears and make both the currency and insurance aspect of your purchase as simple and cost effective as possible. HIFX plc were featured in The Sunday Times Virgin Atlantic Fast Track 100 as one of the UK’s fastest growing companies in 2003,2004 & 2005. HIFX also enter Reuters’ monthly global FX surveys for dollar analysis and are often in the top 5 global banks and brokers. During the period 2001-2004 HIFX were the most accurate forecasting team in the world. However, in relation to your property transaction, it is not HIFX’s remit to forecast the euro but to protect your hard earned cash!

Keep an eye on the exchange rate using the HIFX currency converter: www.hifx.co.uk/cc.

Call our UK based team on +44 (0) 1753 859159 or speak with our office in Spain (+34) 951 317 345

The details expressed in this article are for information purposes only and are not intended as a solicitation for funds or a recommendation to trade. HIFX plc accepts no liability whatsoever for any loss or damages suffered through any act or omission taken as a result of reading or interpreting any of the above information.

January 10, 2006 | Permalink