It was the Spanish playboy Prince Alfonso von Hohenlohe who put Marbella on
the map in the 1950s, when he founded the swanky Marbella Club and brought
his jet-set friends from Madrid there. In recent years, however, despite the
perfect climate, the town’s reputation has been under a cloud. Corruption
has been so rife within the property market, buyers have been driven away.
Now, after a long-running clampdown that has resulted in scores of arrests,
and local elections designed to usher in a new era of honesty at the town
hall, Marbella is trying to rebuild its reputation and restore buyer
confidence, particularly among foreign investors. It has a new urban plan
from the regional government of Andalusia, based in Seville, and an amnesty
is being declared on many of the illegal developments.
The person responsible for the clean-up is the town’s new mayor, Angeles
Muñoz, 47, the Popular Party candidate, who came to power in May. “We are
going to remove the legal insecurity so that buyers can feel confident,” she
says. “To do this, we will have to legalise practically all the 19,000
properties that were built with illegal licences.”
The task that her new administration faces is a daunting one. “British
purchases are down something like 70% since 2003,” says Chris McCarthy, head
of Viva Estates, a local agency. “Property prices peaked that year, and our
average sale price of €325,000 hasn’t budged since. June was the worst month
in five years, and a lot of agencies are downsizing or closing.”
The top end of the market is also suffering.
“Leading up to the new millennium, we had 20% per annum capital gains for five
years, but it’s been downhill since 2001,” says Diana Morales, who heads an
eponymous high-end agency. And, though the proposed amnesty will benefit
many British buyers innocently caught up in the scandal, others are likely
to see their holiday homes bulldozed and their hopes of a life in the sun
crushed.
There has been no political honeymoon for Muñoz. A GP who started out in local
politics, she served as a junior minister in the previous national
government, and the party she represents is the only one not implicated in
the corruption scandal. Within months of her election, however, her
political opponents are already muttering about potential conflicts of
interest – her Swedish-born husband, Lars Broberg, is a local businessman
with property investments.
Marbella’s problems stretch back to 1991, when a local developer, Jesus Gil,
was elected mayor. Though initially popular, having boosted employment and
cut street crime, Gil oversaw a culture in which anything from building
permits to municipal contracts could, allegedly, be bought. Illegal licences
for an estimated 30,000 properties are thought to have been granted under an
urban plan he instituted in 1998.
Gil, who left office in 2002, died in 2004. Investigations into his years in
office began shortly afterwards. There were dozens of arrests – those taken
into custody included the then mayor and her predecessor – and among those
now standing trial on charges of money-laundering and corruption is Juan
Antonio Roca, Gil’s town-planning chief. He is accused of leading a gang
that obtained £15m in bribes and bungs. In what allegedly amounted to a
development free-for-all – provided the payoff was right – properties were
built on land earmarked for parks and public facilities. Now, in return for
an amnesty on properties built in such areas, the town “must be compensated
with land for new infra-structure and facilities”, the mayor says.
Developers who benefited from illegal licences granted under previous
administrations are expected to provide the land – a total of 118 hectares
is due to be handed over. “Most of the developers have already agreed to do
this,” Muñoz confirms.
However, 752 properties will not be legalised, because planners argue that
they have been built on essential public land, so 377 owners – some of them
Britons – are facing the prospect of these properties being demolished.
Judicial proceedings are in progress. Meanwhile, the new urban plan, and the
amnesty deal it contains, is due to get final approval from Seville next
year.
Many of the properties that may be razed are in the vast Banana Beach
development, just outside the town. John Toomey and his Spanish wife,
Marisa, both 61, bought there in 2004, when the cost of a three-bedroom flat
with sea views such as theirs had risen to about €500,000, and the prospect
of any illegality was not on the horizon.
“We took great care with the legal search, using a local lawyer,” says John, a
property lawyer himself, from Harrow. “There was a building licence from the
town hall, and there was no record of any problems in the property register
– which, by law, should give you all the assurances you need.”
The Toomeys are understandably bitter about the prospect of losing their
seaside home. “The government in Seville was happy to take tens of thousands
of euros from us in stamp duty, but now they say our property is illegal,
while arbitrarily legalising thousands of others,” says John. “Seville is
treating us like criminals, and has never expressed the slightest sympathy,
even though it is to blame for the situation. We trusted the system, only to
end up innocent victims of the public administration’s corruption and
incompetence. One British couple who own in Banana Beach are in their
mid-eighties. It is their only home, but they need to move to a nursing
home, and can’t sell. It is a terrible situation.”
The new mayor – like much of the town’s population, according to recent polls
– hopes demolition will not occur. “I do not believe that demolitions are an
appropriate solution for Marbella, and I will do everything in my power to
protect the interests of innocent buyers,” she says. “We will appeal against
demolition orders.”
At best, however, that will leave some owners, such as those at Banana Beach,
in legal limbo. Given the length of the dispute about the legality of such
developments, some of the affected owners would prefer swift demolition and
a compensation package.
“I haven’t been able to get a straight answer from anyone in five years, and
this looks set to drag on,” says Russell Ellis, 63, a pensioner from
Sidmouth, in Devon, who in 2002 spent €189,000 on a two-bedroom flat on
Banana Beach. “I would prefer a decision tomorrow – even a bad one – so we
can move on. But I’m not holding my breath.” To some in the property
industry, the unlucky owners in the Banana Beach complex are scapegoats.
“What will happen in cases where the developer can’t, or won’t, compensate
the town hall?” asks Morales. She fears that the solution will only spark
more confusion, although she does admit that July was “an excellent month
for the local market”.
There are voices of optimism in some quarters. “The worst is definitely behind
us,” says Desmond O’Connor, head of Alanda Homes, a blue-chip developer and
the Spanish division of McInerney plc, Ireland’s largest home-builder.
Michael Hornung, director of Marbella Club Real Estate, the property division
of the exclusive club, also feels that the town is about to turn the corner.
“Wealthy buyers are coming back,” he says. “They know Marbella is cleaning
up its act.” Building work slowed during the corruption investigation, but
John Fleetham, 47, a developer from Sheffield, has since invested £1m in
three plots, with planning permission, in the upmarket Sierra Blanca
urbanisation. “I believe Marbella will bounce back,” he says. “If you have
made any money in the UK, this is where you want to be. This place is
aspirational.”
Muñoz, meanwhile, plays up plans for a new terminal and runway at Malaga
airport, and, eventually, a high-speed train link to Marbella, which will
boost visitor numbers.
James Hewitt, 49, the former lover of the late Princess Diana, is one newcomer
who couldn’t be more enthusiastic. He arrived here a year ago, with plans to
establish a bar-restaurant, and is renting a flat while he gets the business
off the ground. “Whatever the recent problems, the quality of life here is
unbeatable, and that will always attract people,” he says. “My quality of
life here is three times better than it was in London, for about a quarter
of the price. With the mild climate and outdoor lifestyle, I feel as if I’m
living 600 days a year.”
Mark Stucklin runs www.spanishpropertyinsight.com,
an independent online consultancy; spanishpropertydoctor@sunday-times.co.uk
Spanish acquisitions
A four-bedroom cortijoin Andalusian style home set in an acre of gardens at
the Marbella Club resort. The owner can use the pool, the 18-hole golf
course and the riding centre. For sale for £2m, with Marbella Club Real
Estate; 00 34 952 866306, www.marbellaclub.com
A two-bedroom flat, one of 80 in the Marina Puente Romano development, is on
the market for £1m. It’s situated on what’s known as the Golden Mile,
between Marbella and Puerto Banus. For sale with Marbella Club Real Estate,
as before
A three-bedroom villa, a short drive from the beach, has a garden and a
swimming pool. It is half an hour’s drive from Gibraltar and less than an
hour away from Malaga airport. For sale for £545,000, with Viva Estates;
0800 298 9594, www.vivaestates.com
A two-bedroom flat is at the Alanda Flamingos resort, between Estepona and
Marbella. It has a terrace and parking, and the owner gets membership of the
Los Flamingos golf resort. For sale for £337,000, with Alanda Homes; 00 34
952 902699, www.vivaestates.com
To
the Spanish property for you on propertyfinder.com click here
To
find the Marbellian property for you on properazzi.com click here
What a shame the the comments here do not reflect the reality portrayed in the main article. Marbella is on the way back and it is because many people have chosen to make it their home and open new, quality businesses serving the tourist market as well as the growing local population.
This is of course a reflection of the disappointment felt by many people who bought in the last decade during the infamous Gil and Roca years.
As a local estate agent myself, and having opening in the last year after the scandal hit, I am working hard and trying to build my business. Perhaps because I am a relative newcomer, although I have been holidaying in Marbella for years, I have a very positive outlook on the future for Marbella. There are lots of new restaurants and bars that have open with great food and design and this was a big draw for me.
One must not forget that Spain has come a long way in a short time and will continue to develop and make mistakes along the way.
Guy Marrison, Marbella, Spain
I do feel for the owners at Banana Beach but when I was working there 5 years ago we knew not to take clients to see tht development as it was common knowledge that it did not have building licence and that even if a client wanted to buy it the lawyer would point out this fact and put them off, so I would have to wonder what lawyers were used.
dianne, bimingham,
While I felel sorry for the owners at Banana Beach when I worked in MArbella we knew not to take clients there as it had no building licence and an independent lawyer would point that out to the purchasers so I don't know which lawyers the people in your report used.
dianne, bimingham,
Diario Sur reports today that 40% of estate agents in Malaga province have closed in the last two years. 9,000 have closed in Spain. There are agents around Marbella who have not sold a property for months and get by on rentals or close. Local free newspapers carry more and more private property sales as sellers cut out the agents and cut the prices.
Make a silly offer on five properties you like and wait.
Spaniards cannot afford to pay their increasing mortgages with many families broke by the third week of the month. Foreclosures are up.
Spaniards cut back on holidays this year because they cannot afford to go away. Those who visit their holiday homes eat at home and not in restaurants.
gwilym rhys-jones, costa del sol, spain
My problems from buying in Spain, stem from the lack of interest in the after sales department, of Duquesa Golden Mile.
I purchased an apartment On Duquesa Suites Golf and Gardens, off plan 4 years ago.
When i took delivery of my apartment from day 1 my A/C did not work, it was constantly re gassed which toold me there was a leak somewhere and finally it compressor seized.
I had people look at it and was told it would never work again, and it would cost me €4000.00 to put right.
I approached Duquesa Golden mile and was told that they would not put it right even though they admitted it had never worked.
There are also other apartment holders on my development in the same position.
I find it absolutely ridiculous that i have to pay for my A/C to be put right when it has never worked.
It seems to me that Duquesa Golden Miles after sales leave a lot to be desired.
As i said there are many more apartment holders in my predicament, on my development, it should not happen.
Gary Varney, Essex, England
What a easy way of making money out of the local parks and public land ,,sell it to none locals,, allow it to develope and then use the capitals lawyers to devise a way of getting it back for nothing
beside the owners are forigners, who are wealthy at that.
I wish I could work for one of these councils,, sure beats working
I found it interesting they are asking developers for infrastructure in compensation,,surely these are all based in Gibraltar and are now closed down,,who would these developers be, except a few PLc left over or who came in at the end of everthing. If you developed properties in Spain surly you would set up as a Gibraltar company,, besiders you would pay next to no tax being Gibraltar based
Now you know why Spain wants Gibraltar back
Nicholas Iles, Oswestry, Shropshire