Euro problems.

[russell]

So my mum has a house in Spain. She has lived there for 8 years and sold her property here, so she could retire out there.

Since then, things have changed- I have had children and she is missing her family so much that she wants to return.

She has had her house on the market for a year, in Spain, only 2 people round and no offers. She is aware that the prices have crashed and that she will prob end up in a little 2 up 2 down, but she doesnt care, if that's what it takes to come home.

However my Uncle has scared her this week by saying that she should cut her loses and get out now- even if it means lowering the price of her house more. He says that the euro dead zone is coming and they may dissolve the euro and she could lose everything.

This is all double dutch to me.

Can anyone shed any light for me?
cheers ears

 

[Punishment]

No offense but your uncle sounds like a mouthpiece.

She needs to have abit of patience and lower the price to just below the average in her area, so many people get rich off of people who make desperate knee jerk decisions it isn't even funny

 

[Lakih]

If she is going to do something really effing stupid, just give her my e-mail... id love a dirt cheap house in spain

 

[Corran]

Your uncle is an idiot. Even if the euro dies, the country needs a currency and that currency will have a value. So even if it crashes she may be better off, it impossible to know at this point though if that will be the case though.

But I happily give her £10 for her home

 

[andeh]

It may not be as bad as she fears. Bear in mind the pound has weakened against the euro (from ~1.5 in the middle of the last decade to ~1.1x at present), so losses from the crash will be offset to some extent.

A tale of two housing booms and busts: UK and Spain | Spanish Property Insight Blog might be worth reading.

 

[DaGaffer]

Your uncle is an idiot. Even if the euro dies, the country needs a currency and that currency will have a value. So even if it crashes she may be better off, it impossible to know at this point though if that will be the case though.

^This. The Euro may indeed collapse (although there a lot of vested interests in that not happening), but it doesn't mean a vacuum is left behind. However, your Mum does have a serious timing problem. The biggest issue with Spain isn't the threat of a Euro crisis, its the same problem Ireland has; massive oversupply in the housing market probably means the price she paid for the house is overvalued. This means she has to price based on what's the best she can hope to buy in the UK rather whatever she paid for the house originally (in Ireland houses are down to 50% of their peak in some places, even more).

The one silver lining, as already pointed out, is that the Euro has never been stronger against Sterling. The question is, will Sterling weaken further?

The only other option is, can she rent it out?

 

[Killswitch]

The only other option is, can she rent it out?

I thought this or (if she's not desperate to buy in the UK) then there might be an option of a house swap. I think there are lots of people in the UK who'd love to retire to Spain so a temporary or even permanent arrangement might be doable.

 

[Moriath]

^This. The Euro may indeed collapse (although there a lot of vested interests in that not happening), but it doesn't mean a vacuum is left behind. However, your Mum does have a serious timing problem. The biggest issue with Spain isn't the threat of a Euro crisis, its the same problem Ireland has; massive oversupply in the housing market probably means the price she paid for the house is overvalued. This means she has to price based on what's the best she can hope to buy in the UK rather whatever she paid for the house originally (in Ireland houses are down to 50% of their peak in some places, even more).

The one silver lining, as already pointed out, is that the Euro has never been stronger against Sterling. The question is, will Sterling weaken further?

The only other option is, can she rent it out?

What he said I know a few ppl in Spain like that an no one can sell cause of over supply ATM

If the euro fails something will take it's place no worries there . It's just a supply and demand thing in Spain ATM and unless you bought in a peach location it's gonna take a long time. Maybe holiday let's if not renting it out might help?

 

[Soazak]

No offense but your uncle sounds like a mouthpiece.

She needs to have abit of patience and lower the price to just below the average in her area, so many people get rich off of people who make desperate knee jerk decisions it isn't even funny

^^^^^

I guess this is a +1

But he's already said it

 

[TdC]

keep house. rent it our for 1000gbp/pm in the hols season. laugh like a nutter.

 

[Cadelin]

So my mum has a house in Spain. She has lived there for 8 years and sold her property here, so she could retire out there.

The house is just an asset, as someone else has already said if the euro goes, it will still be worth something in whatever new currency Spain has.

What your mum might need to think about are her other asset. I would assume she has a pension or some other cash savings that pay for her day to day living? Once again I would assume she has them in euros as otherwise she will get hit with an exchange rate fee every time she need to buy something. These savings could be hit if the euro really does go wrong.

If she really is thinking of coming back to the UK it might therefore be worth moving some of her savings back into sterling. The pound - euro exchange rate is good at the moment and it would reduce the risk (which is already pretty small).

 

[Lamp]

just count yourself lucky you don't live in Zimbabwe

 

[ford prefect]

I'm don't think you stated in the opening post if the house in Spain is paid for outright or if it has some form of mortgage on it still or if there is any form of loan for which that property has been used as collateral, If it is the latter, that could be were your uncles concerns lie. Obviously when a currency becomes unstable and/ or banks start defaulting on there own debts, things become very unpredictable. I suspect after Tuesday, when we know more about the US state of affairs, things may become clearer.

Assuming there are no financial concerns with regard to the house, renting it out or looking very carefully at the time share Market might make sense and help to pay for something slightly larger than a two up two down over here. It is still a buyers Market afterall.

As others have rightly said, any pensions or savings should be protected, so it may be a good idea to seek a little advice in that area.

 

[Ctuchik]

just count yourself lucky you don't live in Zimbabwe

and that's worth what, a quid?

 

[Lamp]

Not exactly sure. I've heard its worth 30 - 300 dollars...
The Zimbabwe inflation rate in 2004 was 231 million percent

 

[russell]

Some good ideas and advice, thanks dudes -will read all your posts to her x

 

[russell]

Btw my Uncle is in the financial sector and usually quite clued up -not normally an idiot(!) But he did scare her. he is very wealthy and mum is not, so she worries about these kind of things, and never getting to come 'home'. She thinks they need to drop the price more to 'get out quick', but then she will have much less to spend when she gets back here.
She has a small mortgage in Spain of 20 k Euros.
And a few grand saved to cover moving costs -Ill ask her if this is sterling or euros -I suspect it is sterling savings.
Thanks again for your advice.

 

[caLLous]

Not exactly sure. I've heard its worth 30 - 300 dollars...
The Zimbabwe inflation rate in 2004 was 231 million percent

It's not worth anything; the currency was abandoned in 2009.

 

[Helme]

I got one of those trillion notes for like £2 on some sale