The new and improved Costa Brava, paying your taxes, saving money on currency transfers, and we tell you where you can stick your Euros. Plus Steven Gerrard being a true gent. I bet you missed us.
News
Braving The New Costa
The Times
Forget its old reputation, parts of the Costa Brava are a good bet, says Chris Wilson
The Costa Brava is not what it was in the early 1970s. Watney’s Red Barrel has long been retired as a brand and there is a much greater awareness of the harmful effects of the sun, although mass tourism still blights some parts of the coastline.
The resorts of Lloret and Tossa de Mar remain magnets for fun-loving holidaymakers from across Europe. Snootyboots like me, who seek the authentic Spanish experience, would be advised to look elsewhere. Curiously, elsewhere is not that far away.
As we know, the Costa Brava comes in three parts. The high-rise southern end is for the foreign masses, the northern part is flat and good for water sports, but the middle section, the elbow, if you like, is the jewel in the Catalan crown. This is one of the places where the city types go to get away from Barcelona. It’s a small unnamed area around the villages of Begur and Tamariu with a rugged coastline, indented with coves where pine-fringed hills tumble into water so clear and with fish so stripy that you could imagine there was a coral reef. Here there isn’t enough space to put up high-rise hotels. Instead, small individual developments jostle with each other on the hillsides, competing to get the best uninterrupted view.
This being design-conscious Catalonia, there is a high proportion of “architect-designed” houses to choose from. On this exclusive part of the Costa Brava, where everything is getting so much more modern these days, that means lots of right angles, glass and stark concrete. One of the first houses we were shown had been designed with a picture window running the length of the property and facing the sea. It would have been beautiful had not the view been entirely obscured by a stand of protected Mediterranean pine only three feet from the glass.
The present owners had obviously accepted their fate and had decided to hang their washing directly in front of the window, just as I’m sure the architect had intended. They had also installed a swimming pool which was very long and thin. The effect in this small space was more of a slit trench in a forest, but it must have looked great on paper.
There are not many old houses near the sea, so I decided to consider a new development in the region called Son Forné, available through Your House in Spain. This has only five villas on land that borders a nature reserve, which apparently guarantees that no other construction will take place. The villas themselves are built to ensure maximum privacy. The design is contemporary and, looking at the superb sea views, it was possible to believe that the architect had got out of his office and actually visited the place on this one. The price of €1.5 million (about £1.02 million) seems a little steep for a four-bedroom villa in Spain, but it was one of the features that had a proud boast from the sales team that really put me off: each villa has an elevator.
Now I may have a gram or two of surplus flesh slung around my middle, but even I can make it up the stairs — without a lift — from my infinity pool to the bedroom. What sort of neighbours are you going to get if they have to have lifts, I wondered, as we headed off to “the Dutchman’s house”? A developer who spent his life building for other people, this Dutchman finally built the house of his dreams. It is in Begur, the nicest bit of the Costa Brava, and it has been built to the highest standards; a lifetime’s worth of experience has gone into making the perfect house. He has put it on the market for €1.25 million. There was just one question: why is he selling it? Apparently he decided he doesn’t like it, the estate agent sheepishly confessed. Nevertheless, the house, pictured below, really puts paid to the idea of the Costa Brava as a low-rent destination, although it seems the Dutchman would prefer an old-style cortijo (farmhouse) that you find only further south. You know what? Me too.
MOVING to Spain? Imagine saving a four-figure sum on costs before you even set foot in your dream home on the Costa.
That is the prospect held out by the myriad money brokers who have sprung up in recent years to service the hordes of British people emigrating from these frostbitten shores.
The sales pitch is enticing. Specialist providers can obtain the keenest rates while providing a bespoke service. James Hickman, of Caxton FX, the broker, says: “The difference between ourselves and the banks is the rate we offer. The banks essentially take a larger margin. If you were to go to your bank and ask to transfer £50,000 for a deposit on a property, it would generally quote you a tourist rate.”
He suggests that the saving could be as much as £4,000 on a £150,000 transfer. My attempts to test this claim, however, led to the realisation that nailing the proverbial jelly to a wall would be more easily achieved.
The problem is that foreign exchange rates move quickly. A rather unscientific sample of rates for transferring £50,000 into euros gave results that varied between €1.469 from HIFX and €1.456 from Travelex — a difference of nearly £450 for transferring £50,000.
The problem of nailing down rates is recognised by Steven Hatton, of FX Auctions, a firm that matches buyers of foreign exchange direct with sellers. He says that the rates on many specialist brokers’ websites are so-called “interbank” rates, the level at which big banks deal. This is not necessarily the price at which a deal would be done for a client, he claims.
Whatever the saving, it may still be worth using a specialist firm that has a greater interest in giving you a tailored service. For instance, while a firm such as HIFX sets a £5,000 minimum for one-off lump sums, it will deal with as little as £400 if it is part of a series of regular payments.
You can fix the exchange rate for up to two years ahead. Mark Bodega, HIFX’s marketing director, says: “This is ideal for a pension or salary that you receive every month.”
This can save you bank commission, which may be as much as 2 per cent, Mr Bodega says, not to mention the bank receiving fees at the other end. There is also the matter of speed and customer service. Moneycorp claims that, for deals completed before 2pm, it can transfer money to Europe the same day. Apart from the buy-sell spread, its only charge will be a £15 transfer fee.
Nick Bull, of MoneyCorp, says: “We will send the funds to a bank account specified by the client making the transaction. This is not necessarily their own. Quite often we will pay into a lawyer’s account to settle payments to be made to an estate agent or a seller (of a property).”
Caxton FX also aims to make transfers within a day, claiming a 90 per cent success rate, while levying no extra charges. Currencies Direct works on a 48-hour cycle, it says, but cautions that it can sometimes be difficult to avoid receiving-bank fees of anything between 0.3 per cent and 0.6 per cent.
Similar service from banks can involve extra fees. Barclays, for instance, charges £35 for guaranteed next-day transfers and says that there may be a receiving-bank charge at the other end, which in Spain is typically 0.15 per cent. Royal Bank of Scotland will charge £25 for same-day service, with a Spanish receiving-bank charge of £40.
However, using a bank can give peace of mind. Apart from money-laundering checks, international money transmission remains unregulated.
None of the new companies comes close in financial standing to the banks. Finbarr O’Connell, an insolvency specialist at KPMG, the accountant, says that he would demand to see a letter from a firm’s own bank. “I would ask whether there was a separate bank account for each client,” he says. “If there was a pooled account, the letter would need to show that the sub-sections of that account are kept in credit at all times.”
Adrian Deazle, 39, used Caxton FX last summer to transfer $89,000 (£50,815) as a deposit on a holiday home in Orlando, Florida. “It saved me $1,000 compared with the banks,” he says.
While Spain has long been a favourite destination for UK residents looking to invest in property, there have always been reservations about some of the less reasonable land laws.
While capital appreciation on Spanish property has been essentially unrivalled across Europe for ten years or more, individual cases seem to emerge sporadically in which investors are found to have lost money on the basis of unclear legislation or underhand negotiation.
It is testament to the general appeal of popular investment regions such as Murcia and the Costa del Sol, however, that recent figures from the Office for National Statistics indicate that Spain continues to top the list of European favourites among UK investors.
Around £23bn was spent on property investment abroad last year, with 27 per cent of this going on Spanish property. It is a situation that is set to continue as prospective property buyers find they have more confidence in the general market in Spain.
For one thing, the European Commission is applying strong pressure over a tax discrepancy by which Spanish residents pay 15 per cent tax on profits from property sales but foreign investors pay 35 per cent.
There are also rumbles of discontent in the UK over a forthcoming Planning Gain Supplement, after consultation on the issue came to an end this week. It is a tax that was proposed by the Treasury and the Office of the Deputy Prime Minister, but it is so far unclear how it would affect the average property investor.
The Royal Institution of Chartered Surveyors has suggested that property developers may have to pay as much as 20 per cent of the increase in a property's value, although it may be some time before this issue is resolved.
Returning to Spain, the Telegraph has reported this week that the Spanish government is trying to stamp out the "black money" property deals that have become increasingly common in the country.
Yet again, it is a move that will be crucial in assuring investors that everything is above board - a fundamental prerequisite for the vast majority.
Previously, sellers have been known to request that buyers declare a buying price that is in fact much lower than the price that was advertised, before demanding the difference in cash.
It is a dubious strategy that benefits sellers with capital gains tax liabilities and buyers in terms of stamp duty. The new laws will seemingly be in force at the end of the year, according to the report, and they will put an obligation on both the seller and buyer to reveal their tax identification numbers before completing a property transaction.
Investing abroad is always more daunting than putting money into property within the UK, purely because of language barriers and subtle differences in legal requirements. For this reason alone, any grey areas involving legal obligations merely add unnecessary strain to the transaction and so most investors will be pleased with the proposed amendment.
It seems almost certain that Spain will retain its position as the favourite investment spot for Brits and the clarification of the taxation issue will make the process much more comfortable for the vast majority.
Norwich & Peterborough survey shows Spanish villas and semis increasing in popularity – but apartments are still tops.
Although most Brits still opt for an apartment when buying a home in Spain with a mortgage from Norwich and Peterborough Building Society (N&P), the popularity of detached and semi-detached villas rose slightly, whilst the number of people buying apartments and terraced properties fell again during 2005 — according to the Society.
In 2005:
the total average loan to value borrowed was 55.88%
the average mortgage will be repaid over 15.14 years
the total average loan is £106,871
Mike Sketch, N&P’s head of retail operations, said: “Buying in Spain is still growing in popularity, as people increasingly want to enjoy their retirement abroad or buy a family holiday home that is also an appreciating investment. Property prices are rising slowly, or are stable in the UK and in Spain, prices have also stabilised following a period of growth.”
Find a good home for holiday money
Financial Times
If you escape often to your second home in the Loire Valley or enjoy spending August sipping sherry at tapas bars off the Plaza Mayor, you might want to consider setting aside some euros ahead of time to finance your excursions.
The tough part is working out the best way to maximise the spending power of your hard-earned sterling. One option is to open a current account with one of the local banks such as BBVA or Banco Santander in Spain or BNP Paribas and Credit Agricole in France.
A second and arguably more manageable option would be to open a UK-based account denominated in euros. HSBC, Barclays, Lloyds and Citibank all offer this service. Which option you choose would depend on the length and purpose of your stay.
Euro and dollar-dominated accounts are in vogue these days as more Britons flock to neighbouring countries on holiday. “We’re finding that in today’s world both in business and in leisure, people are more mobile than ever before,” says Simon Wyatt, head of marketing at Lloyds.
HSBC offers accounts in dollars and euros and 87 other currencies, including the Singapore dollar, the United Arab Emirate dirham and the Danish krone.
The monthly cost of maintaining an account with HSBC in either euros or US dollars is £3 while the cost of keeping an account in other currencies is £5 per month. The cost of issuing a cheque in euros is £0.60, while the cost of writing one in dollars is £1. You can transfer money into a deposit account in the same currency and a line of credit is also offered in all currencies.
Citibank offers the same services as HSBC and rates are similar. You can secure loans in local currencies and transfer euros around the world from one account to another. The cost of drawing cheques in another currency abroad is £15. Citibank does not charge a fee for depositing cheques in US dollars or euros into an account but interest rates on most of Citibank’s euro accounts are just 0.05 per cent.
In contrast, if you have a savings account with Credit Agricole in France, for example, you could earn from 2 to 2.5 per cent in interest. If you need a current account to facilitate direct debits and other transactions, you are unlikely to receive any interest.
Another option if you are interested in saving money in Euros is to open a savings account with Nationwide International, Alliance & Lecester International or Bradford & Bingley. The interest on these accounts rival those offered by French or Spanish banks.
The European Central Bank recently raised interest rates for the Euro and some banks have started to follow suit. Nationwide’s rates for Euro savings accounts range from 2.5 to 2.6 per cent.
Separately, Citibank, Lloyds and HSBC also offer mortgages for properties purchased abroad. But the rates can be as much as one to two percentage points higher than if you were to take out a mortgage or loan in the country where you are residing.
Often, people open an account in another currency with a UK bank because they are receiving payments from another country.
But another benefit is familiarity. Many customers who have an established account with a UK bank feel more comfortable taking out an account in euros with their family bank than with one outside the country.
“If a customer has had a standard account with Lloyds for a long time, sometimes that makes them feel more comfortable,” Wyatt says.
However if you own a property abroad and have to pay utility and electric bills or make mortgage payments, in most cases it is advisable to take out an account with a local bank. Paying bills with a standard euro debit card is possible but the fees are usually quite high for international transfers. In addition, overseas banks have been expanding their services for Brits.
In France, banks such as Axa Banque and Union de Credit pour le Batiment, a division of BNP Paribas, have groups that take care of mortgages for British nationals. Credit Agricole has “Britline” branches in Normandy catering to English-speaking expatriates. Its Britline staff all speak English and, upon opening accounts, clients can conduct much of their business such as handling loans and insuring their properties by post, telephone, the internet and fax.
In France and Spain, mortgages can be arranged at far more favourable rates than at a UK bank and monthly payments can be debited automatically from your current account. But the disadvantage is that often money saved on rates is lost in fees when you transfer funds from a sterling account in the UK into one at a local bank. Also, French banks typically require a 15 per cent deposit to secure a mortgage and Spanish banks require around 20 per cent.
“In the UK, you can get away with a 5 per cent deposit on a property, so having to put more money down with a French or Spanish bank can be a deterrent. Also, the fees for estate agents and lawyers for handling the deal are very high,” says Peter Seymour, managing director at The Mortgage Shop Plus, an offshore mortgage broker.
Apartment, Frontline Golf, Furnished, Fitted Kitchen, Parking: Underground, Pool: Communal Pool, Garden: Community, Facing: East Views: Golf, Mountains. Features: Air conditioning, Conveniently Situated for Golf, Conveniently Situated Schools, Conveniently Situated Tennis, Double Glazing, Fireplace, Good Rental Potential, Good Road Access, Immaculate Condition, Landscaped Gardens, Lounge Dining Area, Popular Urbanisation, Quiet Location, Rooms individually heating, Satellite TV, Sought After Area, Tastefully Decorated, Walking Distance to Rest., Walking Distance to Shops, Well presented.
Additional Notes:
Well presented ground floor / garden apartment with three bedrooms two bathrooms ( one ensuite ), lounge dining room, fully fitted kitchen, fireplace, two terraces, storage room plus underground parking. Sold fully furnished.
Apartamento bajo bién presentado de tres dormitorios y dos baños (unoen suite ), salón comedor, cocina amueblada, chimenea, dos terrazas, trastero más plaza de parking subterráneo. Se vende amueblado.
Strike action threat to Easter hotels -Forecasts are for hotels on the Costa del Sol to be full over Easter, but a good start to the season is under threat by the strike call. 35,000 workers are affected by the wage round talks. TypicallySpanish
BBC seek homebuyers in Spain - BBC1 is looking for people to take part in a brand new primetime programme that will show you exactly what's what when it comes to buying a holiday home in the sun. Email: jenny.linton@silverriver.tv
Big Brother Chantelle in Marbella -
The Celebrity Big Brother winner was spotted on a sexy photoshoot on a Marbella beach, and clearly didn't get her orange glow from the Spanish sun - as it was just 12 degrees, according to the Daily Mirror.
Now the bit you actually read...
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Forget its old reputation, parts of the Costa Brava are a good bet, says Chris Wilson 
MOVING to Spain? Imagine saving a four-figure sum on costs before you even set foot in your dream home on the Costa.
Euro and dollar-dominated accounts are in vogue these days as more Britons flock to neighbouring countries on holiday. “We’re finding that in today’s world both in business and in leisure, people are more mobile than ever before,” says Simon Wyatt, head of marketing at Lloyds.
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