Factors to consider and tips for buying a home in rural Spain

  • Price developments in rural areas tend to be slower than in large cities. In addition, it should be noted that, for second home loans, banks have stricter requirements for buyers.
  • The search time may be longer, especially if it is concentrated in a specific geographic area. In order to choose the ideal location, there are some specific factors that must be taken into account, such as the purpose of the investment.

 

Following the advent of the pandemic, 2020 saw a high level of interest in acquiring second homes in rural areas that offered outdoor space and allowed for telecommuting and offshoring. However, this “urgency” that arose during the times of confinement to leave the big cities for the countryside, seems to have diminished with the return to normality and now certain factors must be taken into account when thinking about buying a property in rural Spain. Among them, the time it may take to search in these enclaves, the profitability they can offer or the use to which the property is intended to be put.

So much so, that during the strict confinement some buyers prioritized housing features over location. Moving away from the usual urban environments and the desire for larger homes with outdoor spaces became a widespread trend. However, since the beginning of 2021, markets have been reviving, social activity has returned to being concentrated in cities and telecommuting has been on the decline, which has meant that location has again become a primary factor in the housing search.

This situation poses a new scenario for the acquisition of housing in rural areas. For this reason, the experts of Instituto de Valoraciones explain 4 factors that should be taken into account when buying homes in these enclaves and give some tips for this:

  • The evolution of housing prices in rural areas tends to be slower: According to data from the Ministry of Transport, Mobility and Urban Agenda, provinces such as Zamora (Castilla y León), Teruel (Aragón), Ciudad Real (Castilla La Mancha) or Cáceres (Extremadura), key areas of rural Spain, have registered in the second quarter of 2021 year-on-year price variations much lower than the average of their autonomous community, compared to the same period of the previous year. Therefore, when looking for housing in rural enclaves, it is recommended to analyze the prices and the evolution of these in the different areas in order to take advantage of the best offers on the market.
  • For second homes, stricter requirements and conditions for loan eligibility: when applying for a loan for a second home, buyers generally have to meet stricter conditions and requirements than those necessary for a first residence, given that, when granting financing for this type of home, financial institutions run a higher risk. In fact, the percentage of the total amount covered by banks in loans for non-prime homes is usually lower than for primary residences, and the repayment term is also usually shorter. In this case, in order to qualify for this type of mortgage, buyers must have a very stable financial profile and have the necessary savings to cover the amount that mortgages do not cover, which is generally around 30-40%, and other expenses that may be associated with the transaction. In addition, it is important to foresee the costs of renovations and/or maintenance that this type of housing may entail.
  • The importance of being clear about the purpose of the investment when buying a property: a key factor when buying a property in a rural area is to be clear about the purpose of the investment, in order to be able to choose the location that best suits the buyer’s needs. If the objective is to buy a primary residence, it will be important to value services such as the quality of Internet connections in the area or nearby services such as schools, supermarkets or leisure options. On the other hand, if the purpose of the purchase is to have a second home in which to spend leisure time, probably a good option are the municipalities with smaller population, which also offer lower prices and opportunities in ideal enclaves for rest and disconnection.
  • The time it takes to find a property in a rural area can take longer than expected, considering that these areas tend to have a limited supply of housing. In addition, it is also influenced by the fact that generally the requirements and conditions that buyers are looking for in rural homes tend to be more specific, as they renounce the comforts of living in a city with all the services within reach, prioritizing other factors such as the tranquility offered by living in a rural environment or the possibility of having larger indoor and outdoor spaces for private use. Therefore, the recommendation is to start the search at least a few months in advance of the desired date of purchase, especially if you want to start enjoying the property in a specific period, such as next summer.

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