Why British Expats Are Selling Up And Returning Home From Spain
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Spain`s Worsening Economy
It has been estimated that there are more than one million British people living either part of the year or the whole of the year in Spain.
Many of these are expats who have moved to Spain to seek out warmer weather, along with a more relaxed way of life. Some expats are pensioners, others have to work for a living, and others are financially independent.
Unfortunately though, the Spain of several years ago, when the economy was thriving, jobs were relatively easy to get, and the exchange rate favoured the pound, is fast disappearing. And it`s mainly due to these reasons that a lot of British expats are selling up in Spain and returning home to the UK.
For many, it isn`t that prices in Spain are going up all that much, after all, inflation currently stands at around one percent, which is low by anyone`s standards. But, it is an exchange rate that has badly eroded the value of the pound. Anyone who visited Spain years ago who goes back there now will be able to testify as to the lower amount in sterling they get when exchanging their pounds in to euros.
Let us go back a few years, to March 2007. The euro was then worth roughly 0.68GBP. So, if someone in Spain received their money in sterling (as pensioners do, for example), then for every £100 they could expect to receive €147.
Today though the euro is valued at 0.91 GBP, and that means that for every £100
they would receive €110. That is a 25% devaluation in the £ against the euro over just the past 3 years.
Many of those who have moved to Spain from the UK are pensioners, so their income is largely `fixed` and most of that income will come from the UK. That means there is no escaping the vagaries of fluctuating exchange rates. And it is because of the reduction in income that many can no longer afford to live out in Spain.
Another major problem is the very high unemployment rate in Spain. New house builds have slowed right down, property companies have been taking a battering, and house prices have slumped. So, for those Brits who went out there and got work, some are now out of a job. Figures show that the jobless rate stands at around 20%. As is often the case when the economy is in a mess, the young are particularly hard hit. Statistics show that a massive 43.8% of young ones of working age in the under-25 age group are out of work.
So, for non-Spanish people living in Spain it is tough, as obviously the Spanish people themselves have the advantage of speaking Spanish and too may have family contacts to help them get employment.
I know personally of one couple who lived in Spain for around seven years, and they put their villa up for sale about 18 months ago, at 250,000 euros. They have recently accepted an offer of 140,000 euros, so deep is the recession out there.
Finally, although the economy and the poor exchange rate is the main reason why so many Brits are going home, other factors such as health and homesickness also come in to the equation.
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CommentsLoading...
do you have more pics of the area? would love to see.
Yes, I`ll try to post a few pictures in the next day or two.
More than anything, I think we all get homesick, and look for the familiar.
Yes, not everyone can adapt so easily to life away from the country of their birth. I suppose it comes down to where their `roots` are.
Yes I can relate too to the homesickness :) Great hub! Congratulations to your Hubnugget Nomination! What's that? LOL See it right here: http://hubpages.com/_hubnuggets10/hub/hubnugget-va
Thanks ripplemaker, it`s an honour to be nominated.
Interesting; I lived in Southern UK for about a year. I voted for your hub.
Thank you GarnetBird. I see you enjoy going to San Francisco. I visited there in the 90`s, and I absolutely loved it. Such an interesting place, from the twists of Lombard Street to Alaztraz. I think it`s a place I could never tire of.
Yeah, I think economic change is affecting everyone in some way or another. I love the picture of your villa. Congrats on being selected to this week's HubNuggets Wannabe nomination. :)
The whole world is suffering from the downturn. Even here in the UK, there are cuts here and there. Property prices have stabilised though. Anyway, home is waiting for you :)
Yes, the state of the economy is a mess at the moment. It is sure to be a major part of the decision-making process of many people when they vote in the forthcoming elections in the UK.
Very good hub, interesting to know. Actually European economy is a real mess, since most of the good news are fake, and at Brussels they are just interested in eating what has not been eaten in each country. Rated up and voted.:)
Thanks hypnodude. Just been reading that unemployment in Spain for March was once again up. March jobless claims were 15% higher on a year-to-year basis.
Great hub, I have fond memories of Spain and what seemed like low prices at the time...
I think prices went up a little with the introduction of the Euro in Spain.
Just wanted to say a big thanks to all those who voted for this Hub to make it to the top in one of this week's HubNugget categories. It`s very much appreciated.
Congratulations, expats. Great hub -deserved to win!
I am an expat in the USA and it is mainly the better weather keeps me here,especially after last winter. interesting hub.
Take care, is the watch words. Money in the UK will also become undervalued over the next few years. More Tax will have to be paid on savings, etc. and Jobs are ver hard to come by in the UK as well.
Things no matter what the UK Goverenment say to try to buy votes will continue to worsen for two more years.
Very interesting hub for me. I'm a Brit who lived in Spain for 13 years and eventually headed even further from home (currently living in Canada). Have many British friends still living out there and know some of them have been hard hit by the issues you discuss. Getting and keeping a job amongst those unemployment rates, when Spanish is your second language, is tough. For working age Brits who still want to move there, I hear English (tefl) teachers are still in demand in some areas. Great hub.
I would imagine that English language teaching jobs are still available. English is still one of the main languages in the world, used in business especially.
Interesting Hub expats. Quite the photo of Mazarron Fort overlooking the lake.
Interesting hub, European countries seem in a mess at the moment with their economies. I Hope things improve
it's not so bad as some people make out, I've been living here for 12 years and have seen the good and bad times but it will be business as usual soon enough. As for higher cost of living compared to the past, I think you can say that about any country, it's just a matter of making adjustments but the quality of life makes up for lower exchange rates. If you can then now is the best time to buy property.
Thanks Peter. Yes, I go along with you on now being a good time to buy property, it's probably bottomed out as much as it is going to. I think that unemployment is depressing the property market which is likely to last for a while longer.
Some interesting points in this hub. Can I take issue with one thing though. Just because someone accepted an offer of 140k on a property doesn't mean it was originally "worth" 250k It just means they were asking the wrong price. As the OECD predicted the fall in prices from peak to trough will b around 30-35% with exceptional discounts for people in trouble of course. We are basically at the trough if people are asking the right price, however many aren't.
For anyone who wants some tips on how to make a little extra money in Spain have a look at http://www.bootstrappingsite.com We have made the book to try and help out those in that position
You make a valid point, Graham. As is true anywhere, the value of something often comes down to what someone is prepared to pay. In all likelihood the price they wanted was too high, but that was probably done with a view to accepting a lower offer, as is often the case. I think the crash caught a lot by surprise.
I also think the crash caught a lot of people by surprise but only those living in an expat bubble perhaps. Maybe the severity of the crash caught people out. It sort of went from day to night! However those who were following what was actually happening around them definitely saw it coming. Price rises were just not sustainable at 20% per year n by 2006 prices were simply too high but the banks kept lending.
Guru-C 23 months ago
Too bad this is happening...