Under-30s to struggle with bills this winter

With winter on our doorstep, recent research shows that under-thirties may struggle to pay the higher bills that go hand-in-hand with the dark and chilly nights of the festive season.

Over the penultimate quarter of 2006, almost a third of under-thirties (31%) were forced to raid their savings in order to meet the payments of unexpected bills, Birmingham Midshires' Saving Britain campaign revealed, and since then energy bills have risen 38%.

The lender’s research has found that that the over fifties were the best at budgeting for such a change, with 22% of this age group raiding savings to pay for unexpected bills. More than one in four (26%) people aged between 30 and 50 years were financially unprepared to pay their bills over the third quarter of the year.

Across the regions, Londoners may be the least prepared for unexpected bills over winter. Almost one in three (31%) Londoners had no choice but to dip into their savings to pay for bills throughout the third quarter of 2006. They were followed closely by 30% of unprepared Scots. In contrast, Northerners proved a shining example with just one in five (21%) relying on savings to cover unexpected bills.

Jason Robinson, director of savings & investments for Birmingham Midshires commented on the findings: "Our latest findings make for worrying reading as we move into the coldest season of the year. We all know that Christmas can be an expensive celebration and Britons need to make financial provisions in order to cope with the seasonal generosity as well as the increase in bills over the winter months.”

“Putting aside a little and often will ensure there is enough money in the rainy day account to cover most eventualities over the festive period.”

Other key findings:
Women were less prepared than men for unexpected bills (26% needed to raid their savings, compared with 24% of men).

Almost a quarter (24%) of Southerners were unprepared to pay off all their bills between July and September.

Midlanders and the Welsh were not far behind with 23% dipping into savings accounts to pay for unexpected bills.

Landlords manoeuvre over looming issues

Capital values have increased and returns in the private rented sector have remained largely unchanged this autumn but bureaucracy is driving landlords who own Houses in Multiple Occupation out of their market.

The quarterly survey from the Association of Residential Letting Agents also showed that immigrants from the new European Union states are making less demands on rented property stock than many believe - but obtaining references on these prospective tenants is proving to be a major problem.

Adrian Turner, chief executive of ARLA said, "The mainstream rental market continues to flourish. It is only at the margins that trouble could arise if these two problems are not addressed swiftly."

Overall, the average asset value of houses to rent has increased by 7.4% in the last three months as a result of rises of 11.4% in prime central London and 21.3% in the rest of the UK. By contrast, the average value for houses in the South East outside prime central London fell by 4.4%.

In the same period, rented flats rose by an average of 4.7% for the country as a whole with increases in prime central London at 3.5% and the rest of the UK outside the South East increasing by 16%. In the rest of the South East, the value of flats fell marginally, by 0.3%.
Returns on asset values have changed little in the past three months, although achievable rent levels have increased overall. In the last three months rents have increased in prime central London but have remained largely unchanged in all other parts of the country.

The ARLA research carried out with the support of the ARLA Panel of Mortgage Lenders - Birmingham Midshires, GMAC Residential Funding, NatWest, Mortgage Express, Paragon Mortgages and The Mortgage Business - also revealed two significant new trends.

The latest three-monthly survey shows that well over half of those landlords who have disposed of properties used as Houses in Multiple Occupation have done so because of bureaucracy and too many new regulations. These factors are just as likely to have influenced decisions to abandon that part of the market as the additional costs of licenses and alterations.
On the question of immigration, the majority of letting agents describe incoming tenants from the new EU countries as only having some effect on the rental market. Just one in twenty believe that EU immigration has made any dramatic impact on the market.

The most significant problem for the private rented sector caused by the new immigration is the difficulty in checking references. One in twelve agents say it is proving impossible to get references on prospective tenants who come from the new EU accession states.

Unsurprisingly, immigrants have had the least effect on the rental market in prime central London. They have had the most effect away from the South East.

In London and the South East, the balance of supply and demand for rental properties has continued to improve. More than seven out of ten ARLA agents in prime central London report that there are more tenants than there are properties. This is an increase of ten percent over the previous three months.

Agents throughout the South East who also report more tenants than properties have increased from 34% to 37%. However, there is a small drop in the rest of the UK, with the number of agents reporting more tenants than properties falling from 34% to 32%.

Compared to the third quarter, the average void period has fallen from 26 to 25 days. This reflects properties remaining empty for shorter periods in both prime central London and the rest of the South East.

Once installed, tenants are staying put for an average of 15.7 months. This is up marginally from an average duration of 15.6 months reported at the end of the last quarter.

"These lengths of tenure suggest that the private rented sector is providing the sort of property that people want to live in as well as giving them choice and flexibility," Adrian Turner pointed out.

Flood of properties set to halt price rises

Homeowners looking to sell on the crest of a buoyant property market, with prices at a record high at the end of 2006, are warned that it may have already peaked and prices will drop when new properties flood the market in 2007.

The latest figures from PrimeMove.com show there was a 20% increase in new instructions during November compared to October. Henry Pryor, founder of PrimeMove.com believes this is the result of home owners seizing the chance time to benefit from high prices and sell while the market is buoyant.

Henry Pryor warns that sellers should remain cautious. “Many homeowners are concerned about how long the property boom can continue and are selling their homes now to ensure they maximise their investment, even if this means they go into rented accommodation before buying later on,” he said.

The firm’s data also shows that in spite of the increase in instructions, the overall supply of property is at an historic low with 20% less properties on the market in November than October, driving prices artificially high. With more properties now entering the market and the problems of supply easing this could then see a plethora of highly priced homes sitting on the market in the first quarter of 2007.

Henry Pryor commented: “Although this injection of supply will mean a greater choice for buyers, the knock on effect could mean prices will fall if demand remains the same, signalling the end of the sellers’ market. Homeowners who need to sell, because of divorce or relocation, will need to price competitively to ensure a sale. As a result prices will be lower; potentially starting the slide and signalling the end of the boom.”

“Vendors who are serious about selling next year should listen to their estate agent and price their property realistically. With more choice, buyers will feel more confident of holding out for the right property and will only buy if a house looks to be priced fairly.”

“It is always hard to call the top or the bottom of a market, but I suspect that we may look back at the last quarter of 2006 and recognise that this was the peak of the market.”

Don't get into festive swag mood

Burglars’ swag bags are set to be brimming for the next few weeks as we first hide presents in obvious places then throw out the packaging to advise what we have inside then, to top it all, we leave them all ripe for the taking while we party away on New Year’s Eve.
New Year’s Eve is the festive season’s worst day for burglary, according to Norwich Union claims data. Homes are 25% more likely to be burgled on 31 December than on a normal day as thieves take advantage of partygoers who leave their homes unoccupied and full of expensive gifts.

What’s more, the cost of a burglary over the festive season can be up to £350 higher than on a normal day due to all the extra goodies in the home, according to the insurer. The average burglary claim is around £1200.

So Norwich Union is urging homeowners to take extra security precautions over the festive season to ensure spirits aren’t dampened by thieves on the look-out for newly unwrapped presents.

What’s more, research by Norwich Union shows that homeowners give burglars a helping hand by hiding presents in obvious locations around the home such as wardrobes (44%), under the bed (23%), or in the shed (12%).

Jason Harris, senior claims manager at Norwich Union said: “Of course everyone wants to put their presents under the tree for Christmas but before the big day ensure they’re tucked away somewhere safe and not in full view to every passer-by.”

“The attic or loft is a good hiding place for presents – your average burglar doesn’t have time to climb into your attic and it’s also safe from excited children desperate to get a sneak preview of what they can expect on Christmas morning.”

“And at New Year make sure you double check your home before you embark on your night on the town – you don’t want to begin 2007 with a burglary.”

Because of all the extra items in the home over Christmas, Norwich Union gives an extra £3,000 worth of contents cover over the festive period.

But remember to consider all new gifts when it comes to renewing your home insurance in the New Year. That wide-screen TV may have just tipped your contents insurance over its limit!
Tips to a safe and happy Christmas:

Don’t discard whole gift boxes in your dustbin, as this could give thieves easy clues about what they might find in your home! Instead try breaking them up into small pieces and place them in your recycling bin or in a sealed bin bag

If you’re out and about on New Year’s Eve, leave lights on, ensure all doors and windows are securely locked and expensive gifts not in full view

Avoid leaving the keys in the lock inside when double locking – this will prevent burglars using the hook and cane method through your letterbox

Consider installing a burglar alarm either by an approved contractor or failing that by purchasing a system from one of the DIY chains. ‘Dummy Covers’ are a deterrent but if you can afford it a real one is better. (It may also get you a discount on your home insurance!)
Fit a motion sensor light which will work at any time whether you are in or out of the house.

Top 10 items stolen Christmas 2005
1
Mobile phones
2
iPods/MP3 players
3
Sat-Nav systems
4
Digital cameras
5
Games consoles
6
Laptops
7
LCD TVs
8
Designer watches
9
Pocket PCs
10
CDs/DVDs/Games

UK slips to relegation zone in EU growth league

Despite economic growth picking up from 1.9 per cent in Q4 2005 to 2.7 per cent in Q3 2006, the United Kingdom has slipped three positions in the European Union growth league to 22nd position — or fourth bottom — over the same period, reports the Centre for Economics and Business Research...

Only three countries — France, Italy and Portugal — had lower third quarter year-on-year growth. With 2.8 per cent growth, Germany beat the United Kingdom to 21st place.

Unsurprisingly, as they catch-up economically, the fastest growing countries in the year to Q3 2006 were Estonia, Latvia and Slovakia. Surprise high performers include Finland (5th), Luxembourg (8th), Ireland (10th) and Sweden (11th). Finland — the highest ranking non-accession country recorded 6.6 per cent real growth in Q2 2006 whilst Luxembourg recorded 5.4 per cent — double that of the United Kingdom.

EU bouncing back
Assessing the United Kingdom’s performance so far through 2006, it appears to have done well when compared with 2005. However on another measure — the comparison against other countries in the same economic union of which the United Kingdom is a member — its performance looks rather weak, and for the first time in a long time. The question is why.

On one side of the argument continental Europe’s come back has proved rather spectacular. Apart from the boost from the World Cup (which also lifted growth in the United Kingdom) most countries, including Germany, the Netherlands, Finland, Sweden and Austria are bouncing back following very weak growth in the first half this decade. During that period they cut their unit costs, boosted productivity and their successful companies (such as Nokia, Siemens, BMW, Ericsson, SAP and Philips) have made the most of trade growth within the European Union and the growth in Asia and Latin America. As such, the European Union is becoming more of a specialised economy with member states doing what they are best at, and we are starting to see the benefits of this.

UK has a role to play
The United Kingdom clearly has a role to play in this big economy by being the European leader in finance and business services, just as the Germans lead the European car industry and the Finns the telecoms industry. In the United Kingdom the financial sector expanded 7.7 percent in real terms in the year to Q2 2006, and business services 6.6 per cent. So why has its economic upswing fallen short of the continent’s?

The main reason for this — which is the other side of the argument why the United Kingdom has slipped to fourth bottom — is that the United Kingdom has, other than in finance and business services, failed to improve its competitive position in the world economy in recent years. Business investment barely grew in the three years to 2005, whilst the government sector crowded out the labour market, raising labour unit costs — in contrast to the continent. Fundamentally, despite the migration inflow, the United Kingdom has failed to invest in its capital stock despite the migration boost: real net capital stock growth declined from 2.6 per cent in 1998 to 2.2 per cent in 2005 and 52 per cent of all jobs created between 1996 and 2006 were in public services.

Looking at the European Union growth league table, few of us one year ago would have expected the United Kingdom to be in the relegation zone, given the continent’s lacklustre performance. Yet despite the boost to productivity and the size of the labour force from immigration and the strides being made in finance and business services, the United Kingdom has so far failed to adequately grow its asset base. As a result, with productivity growing faster on the continent, it now seems a fair bet to make that the United Kingdom may remain in the relegation zone in the next few years. Good thing there is no second division...

Nearly one in ten Brits live abroad

More than 198,000 British nationals moved overseas last year, bringing the total number of Brits abroad to more than 5.5 million, according to new research from the Institute for Public Policy Research, published this week...

The report says that a strong economy at home has encouraged emigration and that very few Britons leave because they think ‘the country has gone to the dogs’.ippr’s report shows that almost one in ten Britons now lives abroad and that a British national emigrates every three minutes. The report predicts that another one million Brits will move abroad over the next five years.

Where's everyone going?!
The report shows that Britain has more people living abroad than almost any other country. The top 10 countries where Brits live, together accounting for around 75 per cent of all Brits living abroad, are:

Australia 1.3 million, equivalent to 2 per cent of UK population
Spain 760,000
USA 680,000
Canada 600,000
Ireland 290,000
New Zealand 215,000
South Africa 212,000
France 200,000
Germany 115,000
Cyprus 59,000

The report says that Brits living abroad are also more spread out than any other nationals, with more than 10,000 Brits living in 41 countries around the world and another 71 countries with more than 1,000 Brits.

Language barriers
The report, which includes results from focus groups with Brits living abroad, identifies the inability to speak the local language as one of the biggest barrier to settling into an overseas community. The report highlights the difference between retired Brits living on the Costa del Sol where less than one out of four speak Spanish, compared to retired Brits in Tuscany where almost three out of four speak Italian. Brits in countries like Spain and Saudi Arabia also tend to flock together, in contrast to countries like Australia and the USA where they tend to be more dispersed across the country.

Danny Sriskandarajah, Associate Director of ippr, said, “When the going is good, Brits get going. A healthy economy at home, especially when house prices are buoyant and the pound is strong, makes it easier to up sticks and move abroad. From Australia to Zambia, Brits are looking for a better job, a better quality of life or a sunny retirement. Very few leave because they think the country has ‘gone to the dogs’.

“Britain does not just have the world's leading financial centre and the busiest international airport but is truly at the crossroads of the global movement of people. But our research also shows that for some emigrants, being ill-prepared or not knowing the local language can cloud their experience of a place in the sun.”

Trading places
Recent research from currency specialist HiFX echoes the findings of the IPPR report revealing that over half (51%) of the people emigrating from the UK are skilled trade workers. HiFX predicts that 1.37m tradesmen could have left the UK by 2016.
Mark Bodega, Marketing Director for HiFX, the currency specialists comments: “Australia, New Zealand and Canada, all of which feature in the top ten places for Brits to emigrate to, are facing a shortage of home grown skilled workers so they are marketing themselves as attractive propositions to UK workers who may be looking for a better work/life balance for their family or simply just sunnier climes.”

Many investors will stay close to home in 2007

Many property investors will be keeping their money closer to home in 2007, with the UK in particular looking set to perform extremely well, along with Western European destinations such as France and Cyprus, reports Assetz...

This year has been one of strong and sustainable housing market growth in the UK. The six major UK house price indices show an average of 8.7% annualised growth for the twelve months to October 2006, primarily as a result of the continued imbalance between supply and demand. With lower risk, low purchasing costs and the prospect of self-management, many investors will choose UK buy-to-let rather than overseas holiday lets in 2007. This will be sensitive to interest rates but these are thought to have peaked at 5%.

London will continue to lead UK growth. In the prime central locations of Belgravia, Knightsbridge and Mayfair, price rises of 100% in real terms are possible over the next decade or less, from January 2006. For many city workers, international business people and jet setters, London is a location where they must own property and the weight of money versus shortage of supply in these quality locations will drive a dramatic price shift. Mortgages are not a concern for most and interest rates will have little effect on this market.

Established markets will be popular
While many investors have taken their money to emerging destinations such as Bulgaria and Croatia in the last couple of years in search of higher capital gains, more established markets such as France and Cyprus are now providing strong competition at considerably lower risk.

France is perceived as a high quality destination where investors can see themselves living on retirement, with an established infrastructure and secure property market. Similarly, the Cypriot property market is well positioned to perform well over the next twelve months. When Cyprus adopts the Euro in 2008 it will have to decrease interest rates to the currently lower Euro rate, making borrowing cheaper, which is likely to further strengthen the property market. In addition both destinations are now offering strong returns, with Assetz predicting 8% growth in France next year and 10% in Cyprus, as well as strong tourism markets and low-risk investment.

The continuing slide of the U.S. dollar means better buying opportunities will arise over the next year in the States. Those hoping to invest in the States next year should hold off until the market stabilises and offers the best opportunity to investors. It is not yet clear how severe the downturn in the economy and currency will be, but once the market has bottomed there are likely to be excellent opportunities for investors. International tourism will also soar as the currency rises above $2 to the pound, providing great demand for rentals.

Not all established markets offer safe bets, however. Capital growth in Spain has fallen from 12% earlier in the year to 10.8% currently and is likely to continue slowing into 2007, after which it will probably stabilise. British holiday home buyers will continue to support the market, which is also underpinned by strong demand from Spanish locals for their own holiday homes, as well high levels of tourism.

Emerging hotspots for 2007
Economic growth in locations like Poland will underpin the continuation of 20% plus capital gains in some of the newer European members during 2007. The latest Assetz Property Investment Tracker shows Poland has risen from third position to the top of the table, as a result of lenders halving the deposits required to invest in property to just 15%. This has raised the potential returns dramatically and will continue to do so as long as prices carry on rising consistently. Concerns are primarily over sourcing good property in the face of strong competition from local buyers.

Those looking to capitalise on emerging markets will be keeping a close watch on Turkey in particular, where mortgages were introduced in October 2006 enabling investors to borrow up to 80% LTV. Mortgage rates are quite high at 5.9%, but with capital growth strong at 20% and a surge in demand for property by local people pushing up prices, Turkey is making an impression on international holiday home investors.

The burgeoning change in the psyche of the German population from lifelong rental into property ownership presents considerable opportunity for investors. Growth is starting in cities such as Berlin, where, incredibly, just 13% of the population own their own homes compared to 43% in Germany as a whole, 66% in the UK or 85% in Spain. Interest in residential property is starting to increase, pushing up prices which are now typically still just €200,000 (£137,120) for a two or three-bedroom 100 square metre (1,100 square foot) apartment in a beautiful early nineteenth century building in an excellent area of central Berlin. That is just €2,000 a square metre compared to five times that or more in Paris, London and some other major European capital cities.

Going off the boil
Capital growth in Bulgaria is likely to continue taking a ‘breather’ in 2007 after fairly reductions in the rate of growth for 2006 compared to the prior year. Capital growth dropped from 36% in 2005 to 13.9% for the year to the end of September 2006, and is likely to level out at about 10% per annum for time being. Large deposit requirements with Bulgarian mortgages (minimum of 35% of the purchase price) are the prime reason that this level of growth does not allow it to compete with the UK, France or Cyprus in terms of total returns on cash invested for the investor. While Bulgaria still has value as a holiday home destination and is likely to be a reasonable investment for the long-term, the days of instant gains are over for the time being.

Growth in South Africa has slowed from 24.6% to 12.3% and is likely to continue falling next year. Mortgage rates, already high at 9% are possibly still rising. Yields have slipped from 10% to as low as 5% in 2006, so rental income will fail to make a profit for many investors. Prices however are still low, even for prestigious properties. Good-sized detached properties with pools can be bought for around £160,000 in prime Johannesburg suburbs with many other properties at just £60,000 or so.

Stuart Law, Managing Director of Assetz commented, “There has been a slight lowering in the rate of growth in many countries during 2006 and the UK is the first to bounce, but I suspect many others will follow next year including France, Spain and Bulgaria. With the UK performing so well, many investors will be opting for the low-risk approach and keeping their money in UK property, now it offers strong returns that can compete on the international stage.”

Assetz' Property Investment Outlook for 2007
HOT - Poland, UK, Turkey, Cyprus, France, Spain
WARM - Bulgaria, Croatia, Germany
COOL - South Africa, USA

Landlords in Liverpool tax ‘leeway’ scrap

Thousands of property owners and investors are likely to be hit by a Liverpool council decision to scrap discounted rates on empty properties.

The decision, which is to go before the executive board this week is likely to boost council coffers by £3.6 million a year, reported icLiverpool.

Property owners are currently given six months' leeway when buildings become vacant, before they must start paying 50% of the council tax bill, but after the new financial year the reduction will be scrapped.

As well as boosting council coffers, the plan is intended to put an end to ‘land-banking’ where developers buy up sites and leave them untouched until the property market has improved and they can sell them on for large profits.

However, critics have called the proposal ‘anti-business’ and claim it will discourage investors from buying property in the city, undermining the council's recent pledge to become major players in inward investment.

Up-market flats limit student choice

The National Union of Students has said that higher living costs, including the proliferation of up-market flats, could be preventing many people from going to their universities of choice.
The NUS report shows a 23% average increase in university accommodation revealing the increasing rent burden for students across the UK.

An increasing trend towards the use of private suppliers by universities is pushing the bar towards more luxurious en-suite accommodation - and developments by educational establishments are following suit.

The report highlights the need for institutions and private providers to be able to offer a range of accommodation, and to ensure that more-affordable accommodation is available to meet the needs of poorer students, who might be deterred from studying at a certain institution because of associated high housing costs.

Average weekly rent for university accommodation in 2006-2007 is £82, an increase of 23% since 2003-2004. Since 2001-2002 rents have risen by 37%.

55% of 2007-2008's accommodation will be developed in private partnerships or directly by the private sector. It can be predicted that private providers and private sector partnerships will account for the majority of all ‘university’ accommodation by 2010.

Private halls are providing more luxurious en-suite accommodation (39% of all student housing now consists of en suite accommodation). Accommodation developments by educational establishments are following suit.

There is an increased tendency for private sector rent levels to be less inclusive, with more 'add on' charges.

Private providers fare considerably less well than universities in providing accommodation to disabled students, and much less well in respect of housing dependants and students with caring responsibilities, said the report.

Wales is the cheapest area for student accommodation - it is 56% cheaper to live in Welsh student accommodation than London student accommodation with average rents under £70.00 per week.

Veronica King, NUS vice president (welfare) said “This is a timely reminder that the increased price and lack of choice of university accommodation will need to be addressed to truly ensure poorer students can access higher education.”

“For the students for whom luxury is not affordable, there is a significant risk that accommodation costs, coupled with the burden of top-up fees, may reduce affect their choice of where to go to university.”

NUS is calling for a halt to the privatization of university accommodation which is now setting the bar for all university accommodation by developing more and more up-market housing, and a start to the widening of the range and choice. This will be key in widening participation to university in the coming years."

Valencia most popular with foreign purchasers

In the first quarter of 2006 Valencia enjoyed the highest number of sales to non-resident and foreign buyers of any Spanish region, according to a survey by Spanish bank Caixa Catalunya...

Overseas Property Professional magazine reports on a survey by Spanish bank Caixa Catalunya which reveals that Valencia drew the largest number of foreign and non-resident homebuyers in the first quarter of 2006 (buying 8,879 homes). Next most popular were the regions of Cataluna (5,778), Andalusia (4,028), Madrid (3,899) and Murcia (2,219); by contrast, Ceuta and Melilla were the least popular regions with foreign investors, with only 17 homes sold to non-nationals (just 17).

Overall, an eighth of all Spanish home sales in the first quarter of 2006 were made to foreign and non-resident buyers who purchased 33,241 out of a total of 233,669 homes on the market. The high levels of immigration to Spain between 1995 and 2005 have helped boost the Spanish economy, spurring on employment and consumer demand. Indeed, Caixa Catalunya found that as much as half of Spain's growth in private consumption can be attributable to Spain's growing expat population.

Riding on the crest of a wave
Valencialife.net reports that house prices in Valencia have risen by 11% over the last year and are showing no signs of slowing, with industry insiders predicting that prices will grow "by at least 10%" in 2007.

Next year, Valencia will host the world's most famous yacht race - the Americas Cup. Ahead of this prestigious event, Spain's third largest city is benefiting from £270 million investment in infrastructure, including the expansion of the metro, the road network and the airport as well as the construction of new hotels.

The Diminishing Del Sol

Rising sea levels are threatening Spain's popular coastline,

Spain is a popular choice for most British holidaymakers, but because of the rapidly shrinking coastline, they could all soon be fighting for space to sunbathe, when visiting the white sandy beaches. The signs of global warming are evidently creeping upon us, sea levels in Spain are rising by 2.5 millimetres annually, according to a new study commissioned by the Spanish Environment Ministry.

By 2050 it has been forecast that the beaches will be pushed back by an average of 15 metres. The Albufera of Valencia and the delta of the River Ebro as well as the Dóana national park in south-west Spain, one of Europe's biggest nature reserves, will all suffer the consequences of rising water levels. The eastern Mediterranean coast is the worst affected, in some parts of the Costa del Sol, hotel owners have already asked for permission to bring in their own sand, as beaches begin to shrink and it has also been recommended that some sea walls need to be raised in Spanish ports.

The biggest impact from this will be on tourism and property investment. Spain has enjoyed stable economic growth and the Spanish property market is mature yet dynamic with many different types of properties to choose from across all provinces. However, some are already choosing not to put their money into properties on the coast. "I wouldn't buy a house in La Manga," said Professor Raúl Medina, referring to an area in the south-eastern region of Murcia popular with British holiday-home buyers. "It is a bad investment because I doubt that my children would be able to use it," he told the newspaper El País.

Moving inland
With 320 days of sunshine a year and 60% of tourists staying in private homes it is still an attractive option to buy and rent out your property. There are many places inland that are still underdeveloped and this could lead to new and emerging markets in Spain. Inland regions such as Jaen, Granada and Cordoba have seen high demand as buyers seek alternatives to the over crowded Costa del Sol.

Although it is natural to associate Spain with beaches, the country has a great deal more to offer than beach holidays. Ski resorts in Granada province are very popular in winter and it has the second highest mountain range in Europe, the Sierra Nevada National Park, an uninhabited rugged wilderness with snow on its peaks for most of the year. It also has some superb climbing and mountaineering opportunities. This area can offer the same type of rental market that you would find on a coastal resort.

Despite the shrinking beaches, Spain will still prove to be popular with tourists and property investors alike simply because of the country’s Mediterranean climate and economic stability. Investing inland away from the coastline does not mean that you will be missing out financially, ski developments are very lucrative and there will always be new and emerging markets elsewhere. The key to Spain’s future will be in preservation and although global warming is the cause, much can be done to prevent Spain losing its beaches forever.

Indeed, Disney hopes so. The American giant has recently announced that they will be building a new theme park in the Costa Del Sol...