Expats who sold up in Britain and warmed to the idea of a better life in the sunny climate of Spain have had their hopes dashed by the country’s debt crisis.
Spain is a favourite destination for British expats wanting to retire – but new research claims that at least 20,000 of the estimated 500,000 British expats in the country are desperate to return to Britain but are trapped in a debt spiral that they cannot escape from.
The study explains the main problems are an ever-increasing cost of living, a shortage of care homes for the elderly, loneliness and homesickness as they are stranded hundreds of miles away from family and friends.
The research was undertaken by Dr Charles Betty, who is based in Benalmadena, near Torremonilos, Spain.
Negative equity trap
Betty has spent more than 12 months talking to expats about their experiences and whether they wanted to return to Britain.
He found that an average 5% of British expats living on the Costa del Sol would go home if they could.
One of the main problems keeping them in Spain is the massive drop in house prices across the nation in recent years. Official Spanish government statistics estimate the value of homes has plunged by between 40% and 50% during the past five years.
Many expat homeowners now have properties worth considerably less than they paid for them, and those with mortgages are finding they are trapped in negative equity even if they can find a buyer.
“I am alarmed by how little in-depth research there is into the problems facing these people,” Betty told local media.
Appeal to British government
“I can see that things are really bad. Action is needed to address the problems of accessing home care, and secondly protecting personal savings. The most important issue that concerns pensioners who want to go home to Britain is the poverty trap.
“They are seeing the spending power of their pensions decrease fall and with decreasing financial assets and an increasing cost of living they simply cannot afford to return home.”
The report recommends the UK government should consider offering financial help – especially as an influx of 20,000 pensioners into Britain could place extra strain on already burdened care services.
Another concern is how returning expats could afford to buy a home if they lose money on their properties in Spain.
