British expats in Spain face financial ruin as houses become 'worthless' overnight

Pete Houghton and his family first came out to the Orihuela Costa in 2006, looking to buy a retirement home. As fate would have it, they immediately fell in love with the place, and after Pete was offered a job as a baker, they decided to stay permanently.

Returning to Romford, Pete sold his bakery business and packed up his family belongings before settling down into his new life in Spain. "I don't ever regret a day of it," he told the Express, as he waxed lyrical about his new home. "It's a fantastic place," he continued. "You know, we're stuck right in the middle between two airports. We've got one of the best climates in Spain, about 344 days a year of sunshine.

"We've got so many brilliant beaches right in the middle of between five golf courses on our doorstep, as well as one of the largest open-air shopping centres in the region. In my opinion, I think we've got the best bars and entertainers anywhere in Spain, even Benidorm. Everything's literally on our doorstep."

Surrounded by the Sierra de Orihuela mountains which protect it from cold northern winds in the winter, the region is hugely popular with British and Irish expats.

The urban area has a population of over 78,000 (2021 census) with over a third of its residents being foreign nationals. British expats make up the largest contingent of these, numbering around 10,000. Their numbers dropped slightly after Brexit, but have started to climb again.

Despite the mix of different nationalities, everyone gets on and lives peacefully together. "We've got 117 different nationalities living here, you know, and it's all peace and harmony," Pete said. "I've never heard of a Ukrainian fighting a Russian or an English fighting a Scot, or anything like that."

Yet there is one long standing issue that is causing the British expat serious concerns and threatens to turn his dream life into a potential nightmare.

For many years, the Costa has suffered from overbuilding, as developers rushed to cash in on the property boom.

However, Pete—who is now 69 and an elected member of the local district board—claims that much of the land used for construction was unfit for building. This means that many houses are increasingly in danger of collapsing due to subsidence and, forcing many to abandon their homes.

"There are so many communities where houses have lost the use of their back gardens. Swimming pools have disappeared because of subsidence. Legally, before a developer can go in and build the properties, a council planning official is supposed to go in, do a survey report, go back to the town hall and give his report, saying whether it's suitable or not for building on.

"And so along the Costas, there are so many properties which are now subsiding because the town hall or the official got a backhander."

Pete referred to an expat who has just finished paying a 19-year mortgage for his property, which nominally would have a value of around €300,000 on today's market. Due to land subsidence, the house finds itself precariously perched above a steep drop and is now worthless.

Furthermore, sewage pipes are fracturing, leading to raw sewage leaking into the natural environment. Overdevelopment is a legacy problem which goes back some 10 to 15 years and has forced the EU to take action.

"As far back as 2008, Spain came very, very close to losing all its funding from the EU because of the overdevelopment corruption along the coasts," Pete explained. "So they were given a warning, and they started cleaning up their act. But a year and a half ago, they got another warning."

The 69-year-old said companies are still regularly flouting building laws, constructing apartments in risky locations.

"Legally, you're not allowed to build within 100 metres of a shoreline, but when I drive around, I see apartments - maybe three to four years old - that are well within 100 metres. The coastlines are deteriorating, so whereas today, you might have a first-floor apartment, eventually you could park your boat there, you know."

Pete notes that his local community has the dubious honour of having the highest number of serving mayors either convicted or charged of corruption. "At the moment, it stands at five," he wryly noted.

Pepe Vegara - the current mayor - is due to stand trial in November for the alleged crimes of falsifying documents, as well as VAT and corporate tax avoidance for the 2005 fiscal year.

Despite the shadow cast by corruption, Pete insists the quality of life on the Orihuela Costa is much better than in the UK and makes a perfect place for retirement.

"If anybody was to say to me, we're thinking of retiring out here - you won't regret it.

"We will work through (our problems). Even the local Spaniards are coming out now in condemnation of what's going on."