MORE and more people are coming to Spain to build their own villa.
The advantages are several in that you can design completely to your own spec., incorporating all of those features you always dreamed of.
Also, you would expect the finished article to have cost 10-30% less than if you had purchased the finished article.
But before you jump head first into the build, there are a few things you should know.
- Get expert (legal) advice regarding the plot and potential licence issues…the pitfalls are many.
- You should always apply for your mortgage before the work starts so that you know exactly what your budget is.
- Always ensure you have sufficient funds for your initial up-front costs, ie., to buy your plot, pay for the architect and apply for the licences, as you will not be able to borrow against these.
- As stated above, all banks will expect you to own the land outright including the project and licences and, when you have this, will offer a percentage of the total cost (construction, land) but, very rarely, the percentage of the final value after completion.
- Check how the land is classified. If it is labelled ‘Rustica’, you will find it very hard to get any bank to give you a mortgage both during the build and after. Opt for ‘urbana’ classifications.
- Use a recognised company for the build and ensure they have all the correct accreditations.
- Have a ten-year building warranty in place, as banks will always require one when the self-build is for personal use. This is because if at any point in the following 10 years you want to sell the property, the warranty must be available to the buyer, by law.
- Prepare to pay more interest than a standard mortgage due to the higher risk associated with lending to a project. The term is also likely to be shorter.
If you get all of the above right, the possibilities are endless.
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