Barclays offers 'jet-to-let' deal in Spain

'Jet-to-Let', similar to traditional Buy-to-Let in the UK, is specifically targeted at investors looking to purchase a place in the sun for their own use while also achieving a rental return.

This is the first time that Barclays Spain has entered into a partnership agreement with other names in the non resident property market in Spain. The specially tailored mortgage aimed at 'Jet-to-Let' investors is only available through Savills Private Finance and has an interest only period for up to seven years with no mortgage repayments in the first two years.

The scheme is offered on three Key Resorts developments in Murcia, Valencia and Mallorca:

- In Murcia the Mosa Trajectum development consists of 890 acres of land where 1500 luxury properties are currently being constructed and includes a 27 hole championship golf course, three hotels, an equestrian centre and an Olympic sports academy that is being built in partnership with Johan Cruyff.

- Currently 212 properties have been constructed and the resort is due for completion in 2011. Properties in the first phase of the development are aimed at the top end of the market and prices start at EUR440,000. On an interest only mortgage of EUR400,000 payments on the mortgage will be EUR1,110 per month and Key Resorts predicts that people will be able to achieve a rental income of around EUR1,500 per week with an occupancy level of around 50 per cent. This will give a rental yield of 16 per cent on the value of the property.

- The popularity of Murcia is set to increase as it benefits from increased popularity and improved infrastructure to include the recently completed A7 motorway that links Alicante with Cartagena, increased low cost airlines flying into San Javier airport and the completion of Corvera airport in 2007

- The Balcon del Mar development in Xeresa (Valencia) consists of 400 properties, golf course and spa resorts and in Palma de Mallorca the Aldea del Golf y Mar development consists of 48 luxury villas in an existing golf resort.

Commenting on the partnership, Hugues Pfyffer, Director for Business Development, Barclays Spain says; "We are delighted to announce this partnership with two leading names in the Spanish property market whose customers will benefit from Barclays long standing expertise as a "local" bank in Spain. Servicing International Clients buying a property is an important component of Barclays strategy in Europe and deals such as this will help us gain a greater share of wallet of the mortgage market. Spain has one of the most buoyant housing markets in Europe and we believe that it will continue to be an attractive place for people to buy property."

Mark Insch, International Manager of Independent Mortgage broker Savills Private Finance says: "The UK buyer's attitude to Spanish property purchase has changed dramatically over the past 20 years. In 1985, approximately one per cent of UK buyers bought for investment reasons; today that figure is closer to 30 per cent and increasing all the time, underlining how important projects such as Mosa Trajectum are. Savills PrivateFinance has been key in providing many bespoke market-leading products across Europe in the past and will continue to arrange many more this year. Barclays was a natural choice asour partner for this venture, as it has shown its intention to be a leading player in the Spanish mortgage market."

Marie-Hélène Dubois for Key Resorts says; "Key Resorts realise that the importance in creating superb resorts lies in catering for the market of tomorrow to attract the sophisticated investor of today. This is why we have a long term view in how we look after our clients' investments. This means continually striving to improve the product and continually analysing the changing market in order to scrutinise buyer's demands, thereby creating an overall product and concept flawless to the discerning buyer. With this investment plan, we are catering for the buy-to-let investors who are looking to achieve the ideal combination between a low risk and high return as well as get a yearly free holiday in Spain into the bargain"

The mortgage has a competitive interest rate of Euribor plus 0.95 per cent (current charging rate of 3.3 per cent) and has no early repayment charge on early or full redemption. The interest rate combined with an interest only period is a formula designed specifically by Barclays, Savills and Key Resorts for their customers in Spain.

Key Resorts will provide a guarantee covering all the running costs of the property for two years and take on the risk as to whether or not the rental income generated covers this. In these two years, Key Resorts will build the rental business as well as further developing the resort meaning that at the maturity of the investment period, the owner gets their property back with an ongoing rental business whilst the property has increased in value and increased in rental potential due to repeat business and further facilities being available on the resort.