British expats are finding their dreams of a life of sun and sangria in Spain have been shattered by the Eurozone economic crisis. Tumbling property prices and rising unemployment have gripped the nation, leading to an expat exodus. Official figures from Spain’s town halls show 90,000 British expats sold up and left last year – along with hordes of Germans and French.
The number of Britons living in Spain plunged almost a quarter from 385,179 to 297,229. However, the British embassy in Madrid suggests the number of British visitors living for at least some of the year in Spain as second homers is nearer 800,000.
Dash retirement hopes
The reason why so many retirement hopes were dashed is often related to plunging home values and exhausting legal challenges over who owns the title deeds of property between expat owners and developers.
This is summed by Maura Hillen, the chairman of AUAN, a pressure group based in the Valley of Almanzora, Andalucia that fights for British home owners trapped in tussles over property rights.
Almost 13,000 homes, mostly owned by expats, are caught in the protracted legal challenge.
“The fight for legal ownership seems never ending,” she said. “Many came to Spain in their 50s and 60s seeking a better lifestyle, but the Eurozone crisis has changed all that. Now, many are approaching their 80s, have lost partners and find increasing living costs leave them with little to spend.”
Falling property prices have a huge impact on the finances of British expats wanting to return home.
Values have spiralled down by at least a third since home prices were at a peak in 2007, leaving many in negative equity.
With a glut of homes on the market and buyers difficult to find due to banks squeezing mortgage lending, even those lucky enough to sell often do not make enough cash to buy a home in the UK, where property prices are rising.
Exchange rates between the Pound and Euro also mean returning expats lose money when they change their cash between the two currencies.
Healthcare is also a problem for aging expats. Free medical care is available in Spain, but not on the same scale as in Britain.
Financially, expats paid the state pension are also losing out.
In April 2007, a euro was worth 67p and each £100 of pension income converted into 149 euros. Now, a euro is worth 82p, so each £100 of pension converts into 121 euros. The figures do not take into account foreign currency exchange fees or inflation, which both reduce expat spending power by even more.
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