Spain's Ghost Towns: Built During The Boom Years But Now Lying Empty...

[winkie]

Madrid's a bit like London in that migrants (from within Spain and without) flock there, as that's where the jobs are. Good in some respects, but it means that prices are still way too high, although they have slipped back a little over the last year or two I believe.

That is what you get when there is unregulated lending and unrestricted planning....the Madrid overflow, the problem with all that extra building is there needs to be the people and the jobs that can fill them and pay for them....there also needs to be the infrastructure investment, the schools, hospitals, roads, water, electricity and cheap transport.

[PopGun]

waiting for the re-emergence of the House Harkonnen?

If anyone want's to experience expat hell, head to Fuerteventura!

Whole developments effectively abandoned, half built and left to ruin. A prime example of the debt/money running out in the middle of mass over development.

[Democorruptcy]

It's because the foundations don't look sound with it being built on top of a sand castle.

Next time it rains....

Layer onto that woe the quality of the recent construction. Houses literally sliding down hillsides, huge cracks opening up.

I tried to warn people....

[LiveAndLetBuy]

...

Madrid's a bit like London in that migrants (from within Spain and without) flock there, as that's where the jobs are. Good in some respects, but it means that prices are still way too high, although they have slipped back a little over the last year or two I believe.

The last few months have seen real falls in non-central Madrid. Houses that were selling for 200k 8 years ago are now on the market for 80k. The centre of Madrid is seeing falls as well - but it's harder to say by how much.

I agree with you that the Soto de Hanares video is a bit misleading. Before the crash there were plenty of new areas in Madrid that looked like that (e.g. Las Tablas, Sanchinarro, and many of the PAUs) because they were building lots of flats at the same time, and in the same places. If you suddenly plonk 20 blocks of flats next to each other on a new development there's no way they are going to fill up immediately, so it will inevitably look like a ghost town to begin with. These days if you go to Las Tablas for example, it's becoming established and I know many people happily living there. I don't know about Soto de Henares because I've never been out that way, but I wouldn't base my judgement on that video.

[suggs]

Those are images of Seseña - an infamous new town south of Madrid (towards Toledo)

The flats aren't too bad (pool, gym ,etc) except they're miles from anywhere and nobody lives there, and therefore there aren't any shops, etc

Last month Santander started offering 2 bed flats with parking for something like €65k - I imagine with quite generous mortgage conditions as well.

yes its a great time to buy

[Bloo Loo]

If anyone want's to experience expat hell, head to Fuerteventura!

Whole developments effectively abandoned, half built and left to ruin. A prime example of the debt/money running out in the middle of mass over development.

when we went several years ago, there was loads of building work...reason...the Authorities had said..no foundations by such and such a date ( it was weeks away) no permission to build.

FLash back to two years ago, as you say, those self same half builds still empty and half built.

Google Earth the North coast and there is a really wierd development that was going up.....

[winkie]

For all those who have fallen for that wonderful stirring music.

http://www.youtube.com/watch?v=hKLpJtvzlEI&feature=player_embedded

[LiveAndLetBuy]

yes its a great time to buy

In Spain it is starting to get that way (another year of economic hell and a weaker euro should do the trick)

[Debbie568]

Well you're wrong. There are many landlords do accept tenants who don't work and claim LHA and other benefits. Benefits as claimed by the individual. A landlord isn't there to claim it directly on their behalf, so they have no commercial risk.

It's perfectly right any LHA is paid directly to the claimant, and they have responsibility for paying the proceeds towards rent to the landlord.

Why rent to this kind of tenant at all? Because many properties couldn't be let out to anyone other than those claiming benefits. Or they wouldn't be able to get the same level of rent for them. If you want it your way, then rents by by government in LHA must be lower.

In some instances if a tenant claiming LHA, isn't paying the rent the landlord, the landlord can seek payment from the council, and arrears; but not always. If they don't want commercial risk then don't become a landlord. It's the same for all tenants, not just those claiming LHA. My friend's firm earn good fees recovering possession for landlords. There is commercial risk.

Everything is so simple in Debbieland. Apartments can't crash in value because of growing population. Banks must loosen credit to write mortgages to people who can't afford to buy else the banks won't make money. Millions of people, including owners, in precarious financial situations can't be house prices down.

The only differences between here and Spain are that our housing prices are genuinely propped up by the needs of our ever growing population for housing, especially given the lack of new affordable housing coming onstream, and, much worse, rents, and therefore prices of the houses themselves, are artificially determined and propped up by ridiculously high LHAs.

Yes, LHA rent levels are way too high and should be set lower. If it's okay for people to have to work for the minimum wage - what does one clear full time on the minimum wage? A litle over £200 a week? - then they should be able to rent reasonable housing for a quarter of what they clear. One way to ensure they are able to do that is to reduce the LHA to £50 a week and no more. Beneficiaries, (as opposed to working people), usually, if they have children, have more income than one would clear on the minimum wage. And yet, thanks to successive governments, we subsidise their housing up to not £100 a week, not £200 a week, but a massive £400 a week. As for paying 100% of the rent (and at least it is now down to the lower of LHA or actual rent) what incentive is there for the beneficiary to seek out property they can afford? None at all, since they don't have to contribute anything to their housing costs. How about a co-payment, i.e. subsidising actual rents up to 70% of the rent and no more?

If we really want housing to return to affordable price levels, we will have to do as Spain does - no housing subsidies at all. Well, they do provide one to young people in their 20s. And I can't see us putting up with the consequences of the shanty towns that litter their landscape due to their housing benefit policy. But if a reasonable amount to spend on housing is 25% of your after tax income, AND if the minimum wage is meant to be a living wage, why not just reduce the maximum housing subsidy to a quarter of the minimum wage after tax income?

Landlords would suffer? Too bad. they have profited immensely from our ridiculously high LHA. It's about time they experienced real commercial risk.

Here's an example of how stupid our LHA levels are. Humber Street, Cheetham Hill (M8 0PX). In the mid 90s terraces were selling in this street for between £10k and £20k. By 2004 they were going for around £50k, fuelled solely by speculators looking to rent them out to people at the highest rate for the LHA. By 2010, some of the houses in that street (not exactly prime real estate and not a particularly nice part of manchester to live in) were selling for £120k. That's the LHA for you. There wouldn't be many salaried professionals wanting to live in Cheetham Hill. They'd probably prefer Didsbury/Wilmslow, to the south of the city centre.

Edited March 30, 2012 by Debbie568