Law firm DWF has seen an increase in the number of borrowers approaching the company for advice as Spanish holiday home owners are hit by high rates and the weak pound.
Antonio Guillén, a Spanish lawyer with DWF’s Manchester office, says that if a property is repossessed and the outstanding mortgage is not covered the lender could issue proceedings in the UK to recoup the money owed. Borrowers could also be put on a register of bad debtors and be blacklisted in Spain for six years.
Guillén says: “This may not worry UK residents who decide to leave Spain. But Spanish lenders are aware of the importance of credit ratings in the UK and are now exploring ways to pass on information to UK databases.”
Clare Nessling, operations director at overseas mortgage specialist Conti, says those at risk of defaulting on their Spanish mortgage could either remortgage or rent out their property.
She adds: “Home owners could also consider using a specialist foreign exchange firm to lock into a rate in advance so they know how much they’ll need to pay each month.”