The foreign owners of thousands of properties on Spain’s Costa del Sol which were revealed to have been built illegally will be celebrating the decision not to demolish the homes. The 18,000 homes were built after corrupt councillors took bribe money in exchange for ignoring planning laws and letting the properties be bulit without the proper licences. The majority of the people who bought these homes were unaware of the situation until the scandal was exposed three years ago, and have been nervously awaiting the council’s decision on the future of their holiday homes.
The regional government, the Junta de Andalucia, has said that it won’t be punishing buyers ‘who bought the properties in good faith’ and could stand to lose a lot if the homes were demolished as most insurance for holiday homes is unlikely to cover them in the event of such a situation. It is expected that the majority of the buildings in question will be allowed to stay, though there are a few flats built on protected land that will learn of their fate when the local government makes their official decision later in the year.
This is good news for buyers who already have money tied into these properties, but the effect of the situation on the property market as a whole could last for some time. The huge numbers of new properties combined with the recession have caused prices to plummet so low that developers are being forced to offer discounts of as much as 55% for properties on the Costa del Sol, most of which are being snapped up by holidaymakers taking advantage of the cheap prices and great deals on home insurance in Spain. The problem is that with prices so low, only the very best properties are selling – no one wants to buy a cheap flat in an urban area when they could have a luxury apartment on the beach or a holiday cottage, insurance policies are cheap too and buyers are taking advantage of the discount, leaving thousands of properties in more built-up areas unsold.
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