Why should you invest in either the UK or Spain?


 

Being based in The Netherlands we are witnessing some serious laws which makes it very hard to invest in Dutch property. Think of new tax laws (Box 3 vermogen) and rent caps (verhoging puntenstelsel). Rising interest rates requires higher yielding properties to be a better alternative than "risk-free" money market funds like governement bonds.

You might want to look across the borders like the UK and Spain where property prices are much lower and yields way higher. Gross yields between 8 and 20% are very achievable.
Unlike in the Netherlands where property investors are seen as slumlords (#huisjesmelker), a property investor in the UK and Spain are very welcomed as they improve the neighborhoods and provide good quality and affordable homes. If owning your own property abroad sounds interesting or if you just want to invest through secured loans, we are more than happy to discuss the possibilities.

Have a look at some of the key potential and differences between the UK and Spain below.

Category

UK

Spain

General

The property market in the UK is well-established. The current rental market is hot and there are lots of great property deals to be found for cash buyers. Also laws and regulations are in favor of landlords with tax benefits for investing in a limited company.

Spain is a popular tourist destination, known for its nice weather, beautiful beaches, vibrant culture, and historic architecture. Spain's property market has experienced significant growth. This makes it an attractive location for short-term vacation rentals, but also renovating tired, neglected and cheap properties to add value.

Setting up a company

Starting a limited company (LTD) in the UK is an easy and straightforward proces for international investors. Creating a LTD will cost around £200 and can be completed in one day.

Investing in personal name has a lot of disadvantages in the UK, please speak to a financial advisor.

Investing in Spain can be done both in personal name or a limited company called Sociedad Limitada (SL). When planning for setting up a SL it's a bit more difficult and timeconsuming. Expect €3.000 costs and completion in around 2 months.

Regulatory Environment:

The UK has a well-regulated property market with clear legal frameworks for property ownership and transactions.

The regulatory environment in Spain may be considered more complex, especially for foreign investors. It's important to understand local laws and regulations.

Rental market

The rental market in the UK is robust, particularly in major cities. There is generally strong demand for rental properties, making it an attractive option for investors seeking rental income.

Spain also has a strong rental market, especially in popular tourist destinations and major cities. Cities like Valencia are also very popular for students. Renting an apartment room by room for students and young professionals is very lucrative.

Financing

The lending market is very mature. You can buy properties with a mortgage, bridging loan and you can refinance after a renovation. The interest rates for non-UK investors tend to be 1% higher than for UK landlords.

It is possible to buy a property with a mortgage. Refinancing in Spain is harder because most banks only lend on the purchase price and not on the done-up value. There are ways to get around this which we are happy to discuss.