Is it worth buying a holiday home in Spain as a UK citizen?

Considering buying a vacation home in Spain to escape to during the cold season or whenever you feel like it? 

Explore the property market, and potential opportunities, and discover if it's an investment worth your money. 

Keep reading as we offer insights for UK citizens to guide their decision-making of investing in Spain.

What’s the property market like in Spain?

The property market in Spain presents a blend of opportunities and challenges. 

Despite prevailing economic uncertainties, key locations such as Costa Blanca, Costa Cálida, and Costa del Sol stand out as reliable investment havens. Given their prolonged tourist seasons, these regions are particularly enticing for those eyeing rental properties. 

While property prices have surged in the past, the current economic climate suggests a potential moderation, with prices possibly decreasing by 1–3% over the year. 

It's worth noting, however, that new constructions may remain unaffected by this trend, primarily due to the escalating production costs.

Property prices in the UK vs. Spain 

Property prices in Spain are generally more affordable than in many UK cities, making it an attractive option for a diverse range of buyers. 

On average, the prices for an apartment in the UK are up to 55% more expensive than an apartment in Spain, depending on the location and the proximity to the city center.

For a clearer perspective, let's compare property prices between major UK cities and Spain.

Best places to buy a holiday home in Spain

Wondering about the best vacation spots in Spain to buy a house? 

We've compiled a list of 5 locations along with some tips about each one of them. 

#1. Alicante

With its warm and sunny climate, Alicante stands out as a favorite among UK citizens, making it more appealing than many European destinations. This city hosts one of the most substantial British communities, with 300,000 members.

British expats have long favored Benidorm and Torrevieja, a trend likely influenced by the excellent flight connections linking these towns to the UK.

🏠 As of March 2024, Benidorm's average residential property asking price reached 2,883 EUR/m², reflecting a significant 16.44% growth from the previous year's 2,476 EUR/m².

Meanwhile, in Torrevieja, the average residential property was priced at 2,241 EUR/m², showing a 13.64% uptick from March 2023's 1,972 EUR/m².

#2. Ibiza

If you have a very active lifestyle and are interested in vibrant nightlife, Ibiza is a great place for fun. Its excellent connectivity to the UK and diverse real estate options make it an even more appealing choice.

British citizens may soon be able to extend the duration of their stay, as the Spanish government has advocated for the removal of the post-Brexit 90-day limit in EU countries. 

🏠 In March 2024, Ibiza's Dalt Vila-La Marina area had the highest property asking price at 7,447 EUR/m², while Ses Figueretes-Platja d'en Bossa-Cas Serres had the lowest at 5,119 EUR/m².

#3. Malaga

Compared to many European cities, Malaga stands out with its affordable living and diverse property options, from beachfront apartments to traditional Andalusian homes, offering a rich culinary experience highlighted by its Andalusian cuisine, tapas bars, and fresh seafood.

The city's excellent connectivity to the UK and a well-established British expat community make it even more attractive.

🏠 In March 2024, the average listing price for residential properties in Malaga was 2,841 EUR/m², reflecting a 17.98% increase from March 2023's 2,408 EUR/m2.

#4. Canary Islands

The Canary Islands attract British property buyers with their beautiful beaches, and potential for rental income. The islands' affordability and well-established British expat community make them a favorable choice.

Property prices in Tenerife are more affordable than in Madrid or Barcelona, making it an attractive investment, especially given its popularity as a vacation destination and the tax benefits for rental income.

🏠 In March 2024, properties in the Canarias region had the highest asking price in the province of Santa Cruz de Tenerife at 3,061 EUR/m². In contrast, the province of Las Palmas had the lowest average price at 2,173 EUR/m².

#5. Barcelona

Even though Barcelona is among the places with the most expensive properties to buy in Spain, the price per m² for an apartment in Barcelona can be up to 200% cheaper than in London, depending on its location inside or outside the city center.

Barcelona offers a diverse property market, from chic city center apartments to historic homes in the Gothic Quarter, catering to various preferences and budgets. As a hub for startups and global businesses, the city is an ideal relocation choice for those seeking career opportunities and pleasant weather.

🏠In the last two years, property prices in Barcelona peaked in August 2022 at 4,050 EUR/m². Conversely, the lowest average asking price was in November 2021, at 3,830 EUR/m².

If you're still weighing your location options, continue reading a guide with the best places for a holiday home in Spain, prices, and considerations for non-residents purchasing property. 

Pitfalls of buying property in Spain

When considering buying a property in Spain, it's essential to be aware of potential pitfalls to avoid scams or issues during the purchase process.

• Choose a realtor associated with a reputable organization, like the API Association of Spanish Realtors.
• Hire an English-speaking lawyer well-versed in Spanish property regulations.
• Always conduct a property survey; it can uncover construction issues, saving you from costly repairs.
• Be aware of local rental regulations and licensing requirements if you're considering renting out the property when you're not using it.
• Familiarize yourself with the updated regulations regarding visa-free stays in Spain, as the UK is no longer part of the EU.

Is it hard to get a mortgage in Spain as a UK citizen?

Even if the UK is no longer part of the EU, you can obtain a mortgage just like before Brexit. 

It might be complex, with different requirements, but the process is similar for UK citizens as it is for EU citizens. You must meet the requirements set by banks and demonstrate that you have a stable income that allows you to repay the loan within the agreed-upon time between you and the bank. 

If you're interested in securing financing to buy a holiday home in Spain, read how to get a mortgage as a UK citizen to understand the process and prepare everything you need. Our guide will show you what to do and what common mistakes you should avoid when applying for a Spanish mortgage as a non-resident.

Compare Spanish mortgage offers directly from the UK 

Santander, Sabadell, Caixa, Cajasur, and Bankinter are top Spanish banks providing mortgages to individuals earning in GBP. 

The good news is that you can request offers from these banks through Homevest directly from the UK. Homevest is a service that digitizes access to banking offers for non-residents. This platform allows applicants to interact with several banks in direct competition, ensuring they get the best mortgage deals.

You can upload all the mortgage documents onto the platform, and then you have the convenience of managing and tracking the progress of your application directly from your Homevest account.

What should you know about buying property in Spain after Brexit?

While British citizens can continue buying properties in Spain and secure a mortgage, certain aspects have shifted following the UK's exit from the EU. 

These changes include:

• Post-Brexit, UK citizens are treated as non-EU citizens. This means you can stay in Spain for up to 90 days in any 180 days period without a visa. Staying longer requires a visa or residency permit.
• If you purchase a property in Spain with the intent to rent it out, you'll be subject to a 24% tax on rental income, with no allowance for expense deductions.

Beyond the purchase price, UK citizens should be aware of ongoing costs like property taxes, utility bills, and potential increases in these costs for non-EU residents. 

Continue reading everything you need to know about the taxes you must pay when buying a property in Spain as a non-resident.

Is it worth buying a holiday home in Spain?

Owning a holiday home in Spain provides the benefits of a warm climate, rich culture, and potential rental income. However, it also comes with challenges, like maintenance costs and fluctuating property values.

Ultimately, the decision is yours.

Keep in mind that there are solutions to facilitate a seamless home-buying journey from the UK. For instance, Homevest can assist you in exploring competitive mortgage offers from top Spanish banks.

Sources used and checked in April 2024:

1. 2023 Spanish property trends
2. Property prices comparison between the UK and Spain
3. Property price data in Spain

We recommend obtaining professional or specialist advice before taking or refraining from any action based on the content in this article. The information in this article does not constitute legal, tax, or other professional advice from Homevest Limited. Prior results do not guarantee a similar outcome. We make no representations, warranties, or guarantees, whether express or implied, that the content in this article is accurate, complete, or up to date.