Urban development in Spain and irregularities

According to the findings of an investigation carried out by the European Parliament Committee on Petitions local, regional or even national authorities do nothing to prevent irregularities occurring in the endless urban development taking place in Spain. This ever increasing development has resulted in the growth of urban populations sometimes to an unsustainable level with regards to available resources. Those most affected by this situation are the inhabitants of areas under development and the purchasers of new properties.

The European Committee on Petitions visited Almería, areas in the Sierra de Madrid and the Comunidad Valenciana while carrying out their investigations which took place following a UN report in December which concluded that there was little control placed on urban development in Spain.

The findings of this investigation also show that the application of land laws in some areas of Spain cause numerous problems and that there was lots of pressure on local authorities to commit to massive urban development projects.

The government of the Comunidad Valenciana received the harshest criticism. The Committee pointed out that this was the area where local residents were in most danger and where the authorities were the most uncooperative and the most arrogant in their attitude towards the Committee. Few explanations were offered to explain why many beautiful coastal areas had been destroyed for the sake of urban development.

Furthermore the Committee deeply regretted the fact that officials from the Ministry for Housing cancelled a meeting with them for reasons they ‘found hardly credible’.
The Committee on Petitions said that many citizens in Spain were being denied their legitimate rights when it came to land laws and urban development and this was especially true in the Comunidad Valenciana. They found lots of cases where town halls had given the go ahead for massive building projects which had nothing to do with tourism or improving the area but in reality was down to greed. They found that there were many situations where residents saw the size of their local rural population grow disproportionately without receiving any benefits.

It also highlighted the prospering Spanish economy in recent years and asked how many Spanish owners of Construction Companies could be found in Forbes list of the 100 richest people in the world.

Another worrying observation was that citizens from elsewhere in Europe were buying properties in good faith only to find that they were forced to pay more in charges to the constructors than stipulated in the original agreement.

The management of water supplies and rubbish collection were found to be two of the most serious environmental consequences of massive urban development in the areas investigated. The Committee also found evidence of money laundering.

However, as the European Committee on Petitions has limited powers, it has asked the European Commission to investigate possible cases where European law is being broken and to ensure that local and national authorities respect the law. The Committee also proposes that limits be placed on the excessive power enjoyed by constructors in Spain.

The report also suggests that special tribunals be set up in autonomous regions in Spain in order to look at compensation for those who have lost property through the application of land laws.

Small flats for sale in Madrid and Barcelona

Growth of ‘micro-flats’ in Madrid and Barcelona

According to an article in El Pais this weekend, ‘micro-flats’ measuring just 10 square metres have started to proliferate in the property markets in both Madrid and Barcelona. The asking prices for these tiny flats is around 90,000 euros and are even smaller than the ‘mini-flats’ which measure 30 square metres and were proposed by the Minister for Housing, María Antonia Trujillo, a year ago as a means of creating affordable housing for first-time property buyers in Spain.

Many of these micro flats are ground floor premises, built originally to be sold as a shop or business premises, often with just one very small rectangular window and without the all-important cédula de habitabilidad which is gives the right to use the building for living purposes rather than for business. An economist quoted in the article describes ‘micro-flats’ as hovels or caves or storerooms.

José Luis Gallego, an expert in housing for the Catalan government, claims in the article that the problem of the rising number of tiny flats is exacerbated by the fact that the banks are quite happy to concede up to 100% mortgages for this kind of property. That is, the banks concede credits for properties without the proper legal paperwork granting living rights.

According to Gallego there are hundreds of such flats in Spain’s 2 major cities. He said that by law, to be called a flat the property needs to be at least 20 square metres. However, because the majority are not officially recorded as flats they are not subject to any sanctions and cannot be pursued in the civil courts.

A glance at internet property pages in Spain shows that this is not just a problem in Barcelona and Madrid but that micro-flats are starting to appear on sale in other Spanish cities too.

Related:
Property for sale in Madrid
Property for sale in Barcelona

Expensive flat in Madrid

The second most expensive flat in EU for sale in Madrid

According to three of the biggest web pages representing British, German and Spanish estate agents Madrid is the city where the second most expensive flat is for sale.
The most expensive flat is in the exclusive London neighbourhood, Chelsea, and is for sale at a price of 8.1 million euros. It has 7 bedrooms, a garden and a swimming pool.

The second most expensive flat in Madrid is for sale at 5.4 million euros. It is 600 m2 and has 5 bedrooms, a 22 metre terrace and a double garage. It is in Calle Almagro near la Castellana in the Chamberí neighbourhood.

In order to find the most expensive flats for sale in Europe a group of estate agents looked at prices in Barcelona, Madrid, Valencia, London, Liverpool, Manchester, Munich, Hamburg and Berlín.

In Spain Barcelona and Valencia are the most expensive cities for luxury flats following Madrid. According to this study the most expensive flat for sale in Germany is in Munich. It is 360 m2 and has 7 bedrooms and a library and costs 3.8 million euros.

Related:
Guide to Madrid
Houses for sale in Madrid

Spanish mortgages affected by Euribor rise

The Euribor rises to 4.1% in February

Spanish households with an average mortgage of around 140,275 euros over 25 years will have to pay around 90 euros more at the end of the month as a consequence of the 17th consecutive rise in the Euribor. Calculated over a year this is over 1000 euros more per household. At almost 4.1% it is at its highest since August 2001.

In 2006, 1,864,000 mortgages were granted, a figure 6.3% more than last year. The average mortgage is now more than 140,000 euros which is 12.6% more than 2005.
The Euríbor is the most widely used interest index used by the banks when granting mortgages, most of which are taken out at a variable interest rate. Yesterday’s rise in the Euribor will be confirmed by the Bank of Spain in the middle of March.

For those households that can’t meet the new payments there is the possibility of renegotiating their mortgages and increasing the years for it to be repaid. For example if it is a 25 year mortgage this could be extended to 30 or 35 years which would make the amount due to be paid at the end of every month more manageable.
However, experts have confirmed that the Euribor will continue to rise over the next few months.

At the beginning of February the president of the Central European Bank, Jean-Claude Trichet, hinted that in March interest rates would rise. Financial analysts have predicted that Trichet will raise interest rates by a quarter of a percent over 3.5% and by summer rates could be as high as 4%.