Property For Sale In Spain in the Right Locations
Breaking News
Speed limit Spain or life in the slow lane!
Mar 2nd
AC COBRA - DREAM DRIVING IN SPAIN!
Well, this has come as a bit of a shock! The Spanish government is reducing the maximum speed limit in Spain from its current 120 kms an hour to 110 kms per hour 68 mph). This will be imposed from the 7th March this year – so beware!
The Spanish government is reducing the speed limit in Spain to save the country money, given the current high price of oil. Evidently, every increase of 10 Euros for a barrel of oil results in Spain paying another 6 billion Euros annually for its energy costs.
Needless to say, this reducing of the maximum speed limit is contentious, despite the government lowering some rail costs by 5% to encourage people to use public transport rather than their cars.
Certainly, I am a little dubious about the benefits of reducing the speed limit in Spain and I do wonder whether this is not from the abc school of non-lateral thinking? After all, has anyone computed the costs of labour lost by people driving 10 kms per hour slower – and what about the lost tax revenue?
But perhaps I am being too cynical and too attached to my car (both of which I am) and the notion of being able to drive relative speed. For sure, as someone who loves driving, I resent any incursion on my freedom of the road. The latter has certainly suffered over the years as we have moved firmly into the digital age.
A good example is speed cameras, which I loath, along with many mandatory speed limits – which impose speed utterly irrespective of the conditions and time of day. 40 kms an hour in some areas is ridiculously fast in poor conditions as children leave school, whilst early on a perfect summer’s morning it can be absurdly slow. And yet the speed linit remains the same and the sanctions unaltered.
Meanwhile, the average motorist is, all too often, left to feel like little more than the butt of easy state fund raising – with astronomical state taxes on fuel and non-negotiable driving fines imposed even upon drivers even when they are being far from reckless.
Of course, the conundrum of public transport continues in Spain just as it does everywhere else. Invariably, it is cheaper to travel by train when you are alone. However, once you travel as a family the cheaper option is almost always by car when there are three or four of you. Until that is resolved by a ‘non-abc’ thinker about public transport – then people (particularly families) will still find it more practical and cost effective to go by car.
Maybe I am being too crusty over all of this?
The trouble is that I have a feeling that Fernando Alonso (Spain’s Formula 1 championship driver) is not too far off the mark with regard to the new speed limit in Spain. He disagrees with it and says that at 110 kms an hour it will be difficult to stay awake as a driver!
Of course, Fernando Alonso must mean on the motorways and main roads of Spain – which are normally superb and often disappear in almost straight lines into the far distance. Indeed, one of the joys of Spain is the ability to drive with almost no meaningful traffic for kms on end, at a relatively decent speed. To have to do so more slowly from now on, will, I fear, be a monumental test of one’s ability to remain alert…
Spanish property, safe to buy?
Feb 11th
SPANISH PROPERTY FOR SALE
So, Beatriz Corredor – the Spanish housing minister is appealing for British buyers to return to Spain!
Gosh!
And there are going to be changes to the planning laws to make buying property in Spain clearer for us poor, stupid foreigners.
Gosh, gosh – I am impressed!
Indeed, Beatriz is urging us Britons (according to the UK Telegraph) to: “Come here calmly, and trust in the system that we have and the transparency we provide.”
Oh dear…and it was all going so well, up until that point.
Of course, it is the ‘transparency’ bit that will make some of us ‘old hands’ laugh – and despair. Transparency is one thing that is rare in Spain and is the cause of a good deal of the trouble with buying property in Spain safely. Well – that and incompetent lawyers combined with endemic corruption.
Still, on one level, it is encouraging to see that the national government has finally recognised that the great British Spanish property buying public are important. Indeed, it even looks as though the Spanish government believe that these same good people need protecting.
Wow! The dots are clearly being joined up, at last – which is extraordinary news.
After all the Spanish have treated the foreign Spanish property buying public with utter contempt for years. If you doubt the latter, just check out somewhere like Marbella (see Meltdown in Marbella) or any one of the multitude of property scandals that have been swamping the international media for years and years. None of this seems to have percolated up to national government or, if it has, then it has been ignored in the belief that you can treat all foreign buyers like fools – all of the time.
Meanwhile, amazingly (as far as I can find out) there is not even a national government department dedicated to promoting Spain as somewhere in which to buy property – let alone one making sure that the ‘geese with the golden eggs” coming to Spain are protected!
Can you believe this – given the vital importance to the Spanish economy of the Spanish construction industry and income from foreigners?
Needless to say, there is the tourist department (obviously) but when I spoke to their London office last year they said they had nothing to do with promoting the sale of property in Spain and there was no department responsible for doing so. Almost unbelievable…
Of course, I welcome any changes to the planning laws that make buying Spanish property safer. After all, I have written a book on the subject (How to Move Safely to Spain) and even I weary of banging on about how Spain can be safe to buy in – but only if you approach the buying process with the opposite mentality (i.e. prima facie it is not!).
So, will the new planning laws make any difference?
I do not know the detail – so, I will have to get back to you once I know more (dreading the thought that it may only be ‘window-dressing’).
However, one thing is for sure and that is unless the national government actually makes sure any law passed is enforced - then any Spanish government reassurance will be worthless. This point is well made by the well known campaigner Charles Svoboda who, in the same Telegraph article, trenchantly states that: “The government in Madrid can give all the assurances it wants, but without it enforcing the laws nothing will ever change.”
Absolutely – just check out the Ley de Costas for a law that has not been enforced or has been enforced so erratically that no-one knows whether they are really safe, or not, buying property in Spain close to the sea.
What needs to be done?
Well, quite a lot – to put it mildly.
Certainly, amongst many other matters, I would recommend:
1. A general amnesty to all but the most dreadful/dangerous existing illegal properties.
2. Instant demolition of any property erected that was illegal after the amnesty.
3. Compulsory use of a conveyancing lawyer by any non-Spanish national buying property in Spain.
4. An extremely stringent duty of care imposed upon conveyancing lawyers with a fast, effective and cheap recourse for any negligence or conflicts of interest – backed by stingingly brutal sanctions.
5. A duty of care imposed upon Notarios to ensure, in writing, that a foreign buyer understood exactly what he was buying and any legal implications and liabilities thereon – and a refusal to allow the signing of the deeds without the foreign buyer being represented by an independent lawyer.
I am curious as to what you think?
RELEVANT INFO:
Spanish housing minister appeals to British buyers to return.
10 key factors to buying Spanish property safely
Spanish property – another nail in the coffin
Spanish property – Rural a vitally important term
Urbanizado – a vital classification of land that you must know
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Bullfighting in Spain, the beginning of the end?
Feb 2nd
BULLFIGHTING BY EDOUARD MANET
So, is it all change for one of the most emblematic symbols of culture in Spain – bullfighting?
I ask this because recently RTVE (the national Spanish state TV channel) has decided that they will no longer show bullfighting in Spain at prime time. In fact, from now on they intend only showing bullfighting for half an hour on Saturday mornings. This is almost the equivalent of the BBC declaring that cricket will only be shown on Monday mornings for half a hour at 11.00 hrs.
Is RTVE’s action important?
Well, it is significant, perhaps, more than important. Not least, in highlighting the sheer controversy over bullfighting in Spain. This, it is clear, is a matter that is simply not going to go away. In that regard, it is hard not to draw a parallel with fox hunting in the UK which, after a long running battle was banned altogether. This, I suspect, is what will happen to bullfighting in Spain with the question being ‘when’ any ban occurs rather than ‘if’.
Of course, it would be completely wrong to suggest that there is not reasonably widespread support for bullfighting. Go to ten bars when bullfighting is being undertaken and you will find a fair number have their televisions tuned to the relevant fight or commentaries about it. This is particularly true of country areas.
Equally, a demonstration of bullfighting’s importance within Spanish culture was shown when a recent parliamentary vote to declare bullfighting in Spain a matter of ‘national cultural interest’ was defeated by only 2 votes.
Needless to say, for foreigner and Spaniard alike, bullfighting in Spain is synonymous with the culture of Spain and, along with Flamenco, is what provides the country with an overt and particular identity – however much of a caricature. It is also true to say that fighting bulls (even if not the actual fighting of them) is as emblematic to the Spanish as the British bulldog was to Britons in the past.
The trouble is that few young Spaniards seem to take much interest in bullfighting. Of those that I know, many find it distasteful whilst others are just bored by it. The latter point is understandable as, unless you are an afficionado, the fights can appear disappointingly formulaeic – although Ernest Hemingway argued persuasively otherwise in his remarkable book Death in the Afternoon..
In any event, when a national TV channel decides not to show something or reduces its exposure of something to a minimum then that ‘something’ will certainly suffer. I seem to recall the same happening to darts in the UK when it ceased being televised for a long time. So, RTVE’s decision will not help the cause of the pro bullfighting in Spain lobby.
From a purely cultural viewpoint, I suppose one has to ask whether the disappearance of bullfighting in Spain would have any overall affect upon the culture of Spain?
In truth, I suspect that a total ban on bullfighting in Spain would affect Spanish culture not a jot. Certainly, the ban on foxhunting in the UK (irrespective of its merits) barely scratched the surface of British culture one way or another. Indeed, both fox hunting and bullfighting are side issues to national culture – with the bigger arguments, surely, being freedom of choice, the parameters for state intervention and the protection of the rights of animals…
RELEVANT INFO:
The art of bullfighting in Spain – an explanation.
Bullfighting on its last legs?
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Spanish property crash and the Spanish banks
Jan 26th
APARTMENTS IN SPAIN
I found a recent article by El Pais interesting. This relates to the Spanish savings banks called ‘Cajas’. These are usually quite small, local institutions with only a few branches, a bit like the UK’s old building societies. That said, not all Cajas comprise only a branch or two. la Caixa (the biggest Caja) is enormous and has about 4,700 branches throughout Spain and some 20,000+ employees.
The problem is that the Cajas are in trouble, so much so that ‘a flurry of forced mergers’ has seen their numbers drop from 45 to 17. This has been largely due to their exposure to the Spanish property crash and their part in the lunatic lending that was conducted during the Spanish property boom.
Without doubt, the Cajas have been ‘notorious’ for their localism and ‘political’ nature and their troubled situation now has come as no surprise to anyone. Indeed, I am surprised that they have lasted so long, before the truth behind their debt exposure was revealed.
Certainly, last year’s banking stress test was laughable to anyone with any knowledge of the effect that the Spanish property crash was going to have on the banks. It revealed that only a handful of Spanish banks were endangered – when the reality to anyone here, with just a few brain cells working, was so obviously very different.
Of course, the toxic bit for the banks is the amount of new development that they funded. Some of this is set to go well beyond any sane description of ‘toxic’ and relates to the funding of purchases of rustico (arable) land on the basis that it would be urbanised (redesignated as building land). Needless to say, this land (sometimes bought at ‘building land’ prices) has sometimes not been redesignated or, if it has, will not be built upon, possibly, for generations. In effect, therefore, it is virtually worthless…
In the meantime, Spanish property has dropped in value since 2007 by somewhere between 25% – 40% depending upon the segment, the area and the type of property. This is a huge loss for anyone to sustain and gives some idea of the exposure that the Spanish banks face on any building project that they have funded.
Sadly, the downward vortex with regard to the overall Spanish property market is set to continue, not least because of the (understandable) reluctance of the Spanish banks to lend. Mortgages are hard to obtain and, until this is reversed, it is difficult to envisage any major reduction in the excessive numbers of properties that were built during the boom – let alone a revitalisation of the market.
Incidentally, I write this not to put you off buying in Spain. Far from it. Buy carefully and there is no reason why any purchase should not be sound financially. However, I very much doubt that you will see much growth in value on any property that you buy – but there are enough bargain priced Spanish property around to make sure that you can easily absorb any further downturn in the Spanish property market.
In this regard, I still see a further drop in overall values this year but nothing like that posited in the El Pais article when it quotes: ‘the hypothetical downturn…’. The figures there are, I am sure, still based around the Spanish government’s ludicrous claim that Spanish property prices have only dropped, since the boom, by about 12%! This is an asinine fallacy and one that the Spanish government needs to clear up as soon as possible. The biggest drops in Spanish property values have long since occurred, the Spanish government needs to acknowledge this fact openly and allow the international community to then base their analysis and future predictions on this data – rather than the ridiculously defensive 12%.
RELEVANT INFO: The prospects for the Spanish economy look grim and mortgages in Spain, Spanish banks and the Spanish property crash and buy carefully and bargain Spanish property and bank fund lures investors with caja reform plan.
Share and Enjoy:Smoking ban in Spain:update
Jan 24th
SMOKING BAN IN SPAIN - DEDICATED 'OUTSIDE' AREA
Andrew Linn (Culture Spain’s Spanish food and wine expert) has been keeping an eye on the controversial (for many) smoking ban in Spain. Clearly, this law has upset a significant minority of the Spanish population as protests against it continue. In my area of Valencia I have seen little of this – but Andrew ( a very occasional smoker only) reports that:
The protests about the smoking ban in Spain are increasing rather than decreasing. Demonstrations have taken place in many Spanish cities and more were programmed for last weekend. There were also plans for bars to close for several hours as a further protest. In the Basque country plans are afoot to remove cigarette vending machines from bars, so as to eliminate a large part of the income the State receives from taxes on tobacco (bar owners by comparison get little profit from these machines: to make 150 euros they have to sell 1,000 packs.)
Meanwhile, the conference centre at Torremolinos, one of the largest in the south of Spain, has announced it will construct a part-outdoor area where events can be held and where smoking will be legal. Interestingly, theTorremelinos centre is controlled by the municipality.
The catering sector has published the results of the smoking ban in Spain so far – with estimates that bars have lost as much as 40% of their pre-ban business. In the likely event that every bar has to dismiss one employee, the resulting increase in unemployment will, needless to say, be massive.
So far there are no reports of fines having been levied for breaking the anti-smoking law in Spain, although the authorities have made many threats and there are possibly fines pending court procedures.
The bottom line for those opposed to the smoking ban in Spain is: ‘if tobacco is bad, ban it altogether. If it is not all bad, let people smoke in defined places or areas in bars and restaurants. One of the conditions of the anti-smoking law in Spain is that smoking is not permitted in private clubs which flies in the face of democratic legislation that permits such clubs to set their own rules and regulations.
Indeed, Spanish legal specialists maintain that the central government cannot ‘invade’ the officially permitted areas of the autonomous regions by trying to impose a general law that affects all the country. Evidently, this is not within central government’s competence when it comes to such matters as prohibiting smoking in private businesses such as clubs that do not admit non-members, etc. So, it appears that legal challenges to the law are already being lined up.
Certainly, every day there are reports in the newspapers of violence taking place in bars and restaurants because of the ban. In Velez-Malaga two policemen who tried to arrest three smokers in a bar (they had previously asked them to step outside to smoke) were injured in a fight when they tried to arrest one of the offenders who had refused to give his personal details. In Granada a fight erupted between some youths in a city-centre bar when they intervened to defend the lady bar owner who was being threatened by a smoker who had refused to put out his cigarette.
Needless to say, there are probably hundreds of such incidents relating to the smoking ban in Spain each day but it is almost certain that only a small proportion of them get into the press.
RELEVANT INFO: Spanish food and wine and Andrew Linn
Share and Enjoy:Marbella illegal building licences
Jan 20th
HOMES FROM HELL INTERVIEW
Last weekend was interesting as I was helping the ITV programme ‘Homes from Hell’ as an expert, following an article that I wrote some time ago called ‘Meltdown in Marbella’. The latter was about the rampant corruption in Marbella that was (hopefully) brought to an end by Operation Malaya, the dissolution of Marbella town hall in 2006 and the on-going prosecution of some 95 people.
Certainly, what occurred with regard to the issue of illegal building licences in Marbella was appalling and has had a diabolical affect upon the lives of many people who bought property in Marbella. Indeed, it is hard to think of a worse nightmare than finding out that your home is illegal and could be faced with a demolition order. That is a long way from the new, dream life anticipated by many people when they moved to Marbella.
Of course, the authorities in Marbella are hard at work trying to sort out the mess left by the boom years and the actions of Gil y Gil and Roca (amongst others). However, it would seem that the ‘obvious’ solution of legalising some of the illegal property in Marbella is not going to be as straightforward as the Marbella authorities may have hoped. Indeed, I gather a Spanish high court has declared illegal the Marbella authorities attempt to legalise some of the illegal properties.
If you find all of this confusing then you will not be alone! However, this matter is set to ‘run and run’ – whilst continuing to harm Spain’s reputation as somewhere safe in which to buy property.
Needless to say, all of this touches on much of my Spanish property related writing and was one of my reasons for writing my book ‘How to Move Safely to Spain’.
I suppose coming back from Marbella I was yet again ambivalent about Spain and the property situation here. On the one hand it is unquestionable that you can buy property in Spain (or Marbella!) safely. After all, the entire population of Spain is not living in illegal property in Spain!
However, a significant minority of properties in Spain are ‘problematic’ and so, to buy property in Spain - you must be very, very careful!!
Indeed, before coming here to buy, for Heaven’s sake do some research and, if I may be self-serving, at least buy my book – or, at worst, someone else’s that will provide you with the advice that you need. And, believe me, you do need it and the advice may save you, quite literally, from losing everything you have.
In any event, if you do nothing else when buying property in Spain:
1. Get an independent (of agents, developers, property sellers, financial advisors etc.) specialist conveyancing lawyer who speaks English (or your native language) fluently.
2. Get your lawyer to place all his advice in writing to you – everything including an analysis of your proposed property and its legalities.
3. Trust no-one completely and never, ever sign anything unless it is in front of your lawyer.
4. Get a mortgage from a reputable bank (even if you do not need one!). This way you will find the bank doing its own due diligence – to back that of your own lawyer.
5. Always use a properly qualified surveyor and never be rushed – it is always better to lose out on an incredible property rather than buy a disaster!
Finally, property illegalities are not restricted just to Marbella. Not by any means, as a recent Post by my friend Graham Hunt points out up in Valencia. So, be careful – or you may find that you have bought just the type of property that is featured on ‘Homes from Hell’…
RELEVANT INFO: Meltdown in Marbella, How to Move Safely to Spain, dead Germans, iffy builders and dodgy agents.
Share and Enjoy:CULTURE SPAIN:Smoking ban demonstration Spain (Friday 14th January 2011)
Jan 13th
Andrew Linn, Culture Spain’s expert on food and wine in Spain, has just sent me notification about the forthcoming national revolt in Spain concerning the smoking ban in Spain imposed on the 2nd January 2011. This is one fierce and bitter controversy that is clearly set to continue in Spain.
However, what makes Andrew Linn’s very forceful reaction to the smoking ban in Spain important - is his point about the ‘nanny’ state and personal liberties. Andrew barely smokes and so his ‘take’ on this law is far more important than that of just a self interested addict. So, the smoking ban demonstration in Spain tomorrow (Friday the 14th January 2011) may have far reaching implications…
Andrew says:
The rebellion against the anti-smoking law is gathering momentum throughout Spain with a smoking ban demonstration in Spain occuring tomorrow.
I took a trip to the (now infamous) Marbella restaurant, Asador Guadalmina, yesterday, expecting it to be bursting with smokers but, amazingly, although it was busy it was no more so that any other bar at the hour of the aperitif, and only one person was smoking! I signed the anti-smoking ban in Spain petition and proceeded to enjoy their famous pintxos. This is a basque tapa that always consists of something on a piece of bread with a ‘banderilla’ stuck through it (the quails egg with red pepper was excellent, as was the smoked halibut with tomato). There was nothing much wrong with the house Rioja either, and the prices are the same as anywhere else.
However, with regard to the smoking ban – in Lugo, two days ago, a bar owner asked someone who complained about a customer smoking to leave the bar! This action was roundly condemned by spokesmen for the nanny state.
Meanwhile, in Gandia the town hall has rushed through a new by-law increasing the amount of pavement that can be taken up by bar tables, clearly to facilitate smoking outside. In Valladolid a bar owner has called for a demonstration against the smoking ban in Spain law – although the local caterers’ association has criticised the move as too hasty.
But the good news is…….
……. using the social networks such as Facebook, demonstrations against the smoking ban in Spain have been called for every Spanish town and village tomorrow, Friday, at 1230 in front of the town hall.
Even the Spanish authorities have admitted that the biggest problem they face with getting this undemocratic law accepted is the sheer hostility spreading like a virus on social networking sites.
So, see you tomorrow in front of your local town hall – even if you are a non-smoker. Personal liberties and human rights are not to be trifled with.
So eat your hearts out you faint-hearted smokers of Britain, Ireland and other well-on-the-way-to-becoming-total-nanny-state countries!!!
Of course, both Andrew and I would be interested to hear what you have to say. Regardless of the smoking issue, have personal liberties been infringed – and is Spain fast becoming a ‘nanny’ state like the rest of Europe? Maybe you think that this would be a good thing?
RELEVANT INFO: See Spanish Food and Wine and smoking ban too drastic by half!
Share and Enjoy:CULTURE SPAIN:Spain’s smoking ban: latest news
Jan 9th
SPAIN'S SMOKING BAN
I have just received a further missive from Andrew Linn (Culture Spain’s wine and food critic) – as a final note on the contentious subject of the smoking ban in Spain. Certainly, the smoking ban in Spain has aroused some strong feelings with many of you commenting upon this subject.
So, I felt that it was worth Posting Andrew’s comments as they relate to the continuing story of the Marbella restaurant that has deliberately flouted Spain’s smoking ban in what appears to be a kamikaze demonstration of independence – given the huge fines that the restaurant faces.
Andrew Linn says:
The fines that may be levied on the first Spanish bar-restaurant (Asador Guadalmina) to openly flout the smoking ban in Spain are quoted in the press as amounting to 610,000 euros! This is enough, surely, to close down the business and put all its employees onto the unemployed register – at a cost to the State.
However, reports are also coming in, dail,y of other hostelries up and down the country that have joined the protest. Several bars claim they have seen business drop off so drastically since the ban that they either have to allow smoking or close down. There is no doubt that Spaniards are not taking this measure lying down, unlike Ireland and the UK, to name but two.
The thrust of the opposition to the smoking ban in Spain, even from non-smokers, is if smoking is a bad thing – then sales of cigarettes should be banned altogether, along the lines of if you want to get rid of something evil you have to cut it off at the roots. This will never happen of course but it does raise many questions relating to civil liberties and democratic rights.
The oft-quoted reason for the ban in bars relating to the harm it was doing bar workers is hard to justify since they never complained about it, and prior to the ban there is no bar or restaurant on record as having banned smoking on its own account.
What no-one, but no-one, can understand is why a choice is against the law: smoking or non-smoking establishments. Who on earth suffers if, in a row of five bars along the same street, two decide they will allow smoking? Non-smokers will go to the non-smoking bars and employees of the smoking bars would know exactly where they stood and would not be obliged to put up with smoke, if they did not want to. It seems that like many other nonsensical laws brought in by Zapatero’s misguided government, it was thought that a complete smoking ban in Spain would improve Spain’s image internationally.
The number of denuncias for smoking or allowing smoking is still almost nil – so it seems that the famous Spanish tolerance is alive and well…
Do give me your views! Does all of this reflect well on the culture of Spain or does it indicate that Spain still remains behind the culture of the rest of developed Europe? Should ‘options’ be built into laws or are blanket bans the way to rid society of something damaging?
RELEVANT INFO: smoking ban in Spain.
Share and Enjoy:CULTURE SPAIN:Smoking ban in Spain for 2011
Dec 30th
SMOKING IN SPAIN
Lots of predictions will be made over the next couple of days about what will happen in Spain over 2011. Some predictions will, obviously, be right, whilst others will probably turn out to be pure lunacy. However, I think that I can make one prediction that will be accurate – namely that the smoking ban in Spain will change life in Spain.
Probably for the better!
I say ‘probably for the better’ because, like most people, I worry that the smoking ban in Spain will adversely affect the bars and cafes in Spain, which are likely to lose significant business. This is the last thing that they need when many are clinging onto life by a thread, due to the current economic crisis.
Of course, one of the great delights about life in Spain is the profusion of cafes and bars. They are everywhere. In fact, it is often hard to find areas (apart from new estates) where you cannot easily find a bar for a coffee or hard drink – virtually whatever the hour of the day.
Indeed, I think that it would be no exaggeration to say that the bars and cafes of Spain are an inherent part of the day to day living culture of Spain and a vital part of the wonderful sociability of the country.
Certainly having a coffee in a bar or cafe is cheap (in North European terms) and an unusual pleasure. Indeed, I have never known a cafe or bar where I have been hurried by the staff – even if I have ordered no more than a single drink, whilst spending an hour reading one of their free newspapers. This is in direct contrast to my experience of Northern Europe and the US, where bars and cafes are normally only in high street areas and virtually ‘industrial’ in their unrelaxing, urgent turnover of customers.
Meanwhile, it is common for the Spanish to actually take their own food into a cafe and eat it there – only buying their drinks from the bar owner. This would indicate that many cafes probably barely subsist economically and will have trouble making up their income from any loss of smoking customers through (say) selling more meals. Indeed, I fear that many bars and cafes will, sadly, be vulnerable to any turn down in business and close. If (as is likely), this happens then, to my mind, real harm will be done to the overall quality of day to day life in Spain – for both the Spanish themselves and foreigners.
Unfortunately, the downside with Spanish bars (let alone the restaurants) is that it is virtually impossible to escape smokers. As these make up a significant part of the Spanish population, most bars and restaurants are wreathed in smoke. This is far from pleasant and off-putting to anyone from the US or Northern Europe, where smoking bans have been in place for some years now.
I need hardly add that the well proven dangers of smoking justify a smoking ban in Spain and that it was only a matter of time before it occurred. As I have written before, the threat of a full-on smoking ban in Spain has been hanging over the country since the previous rather weak law passed in 2005.
In any event, as of the 2nd of January 2011 everything is set to change – with smoking to be banned in all ‘enclosed spaces of public or collective use’.
So, as a non-smoker, you will be able to breathe a sigh of relief when you come to Spain! I just hope that along with this sigh of relief there will not, as I suspect, also be a groan at the disappearance of many much loved cafes and bars…
RELEVANT INFO: Smoking ban in Spain – too drastic by half! and A really tough smoking ban in Spain or not
Share and Enjoy:Mortgages in Spain, Spanish banks and the Spanish property crash
Dec 29th
PROPERTY IN SPAIN
Well, I thought I had seen it all when it came to the Spanish property crash, Spanish banks and their lending – most particularly with regard to mortgages in Spain. That was until I read an excellent article in El Pais (one of Spain’s leading national newspapers).
As you will see from this article, which is well worth reading throughout, (and is in English), sub prime mortgages in Spain were as bad as those sold in the US. Deliberately baffling to the people they were aimed at, they were no more than a sophisticated, institutional con and were partly responsible for the Spanish property crash.
In a way, the worst part about sub prime mortgages in Spain was that they were a con that everyone within the industry knew about. Indeed, it is impossible not to come to the obvious conclusion that their very presence in the marketplace indicated that the regulators and Bank of Spain knew about them as well and were colluding with the lenders. If they did not – then the inevitable accusation must be that the regulators and Bank of Spain were deeply negligent in not knowing.
Needless to say, the question in Spain, just as in the UK and the US, must be to ask what has become of the senior executives of the lending institutions behind sub prime mortgages? What has happened, dare I ask, to the chiefs of the Spanish banks who were involved in sub prime lending?
I suspect, like elsewhere in the world, the answer is: nothing.
I am struck by several comments made in the El Pais article, one of which is made by Mario Barguño of Equilibrio Financiero, an insolvency expert, who says: “The banks were caught up in a race: whoever wasn’t lending money was losing.”
Yes, indeed.
No control, no long term strategy, no regulation – just crazy lending that anyone, with an iota of sense, knew was madness. However, despite the obvious risks, the rush for ever greater sales commissions and bonuses mesmerised everyone, even those under a duty to act…
Of course, markets are driven by the old cliche of ‘greed and fear’. That is only human. But then for what exactly are democratic populations paying economists, national banks and regulators?
To ensure that neither excessive ‘greed’ nor ‘fear’ gain the upper hand and that scams are not perpertrated upon their populations. That, surely, is the underlying ‘definition’ of regulation in economic matters.
The odd thing about the El Pais article is that it mentions UCI (linked to one of the major Spanish banks, Santander) – which brought back memories for me. Some years ago UCI contacted me to see if I wanted to recommend clients to them for mortgages in Spain, for which I would receive a handsome commission.
I duly had a meeting with UCI in their swanky offices in Valencia. There, I spent half a day being briefed about what most of us would describe as self-certification mortgages. In effect (but not fully appreciating it at the time), I was being asked to become involved in selling sub prime mortages in Spain.
The trouble is that I never really understood what they were on about.
‘It does not matter what they (the borrowers) can really afford to pay’, I was told repeatedly. ‘Put anything down!’
‘Even if,’ I remember asking, ‘they say they are earning half a million euros a year – when I know they are not and they have no supporting paperwork?’
‘Don’t worry,’ was the answer, ‘we will lend depending upon the property valuation.’
None of this made much sense to me – but then I only have a humble law degree and have never claimed to be an economist, despite having worked as an equity trader in the UK City.
Of course, valuations on properties were conducted by the Spanish banks and no doubt by UCI too. However, the valuations were notorious, for years, for being consistently incredibly distorted (upwards) – which ‘justified’ the amounts lent. Everyone in the Spanish property industry knew about this. Clearly, a ´blind eye’ was turned, equally consistently, by the Spanish banks to the actual capacity of a borrower to make sustained mortgage payments on the amounts lent
An absolute, utter lunacy – which made the Spanish property crash completely inevitable and yet so totally unnecessary! The crazy lending was like squirting aviation fuel onto a roaring blaze.
Frankly, it is the unnecessary nature of the Spanish property crash that so angers me. I am still bemused about how it was ever allowed to happen. Furthermore, I am staggered that the negligence of the lenders and the regulators has ended up without the responsible higher executives being heavily sanctioned…
RELEVANT INFO. How the subprime mortgage found a home in the Spanish market and the Spanish economy – meltdown or all okay?
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