BMV property in Spain

The H&G BMV (Below Market Value) property portfolio offers an alternative to clients tired of investing their hard-earnt money into the usual equities and corporate bonds, all of which have an almost pedestrian return these days. The H&G BMV property portfolio is aimed at investors who require a higher and sustainable level of income and for clients who have been frustrated in recent years with low interest rates and fluctuating performance from equities and corporate bond funds.

Indeed, one of the concerns that many investors have is that their investments are concentrated on very few types of assets all linked to the volatility of stock markets – leading to a feeling that they have put all of their eggs into one basket.

H&G focus on BMV properties with large upside potential in Spain and her associated islands, specifically high income-producing flats, apartments, complexes and villas not linked in any way to the stock market. H&G, therefore, are confident that all of our clients will find something to suit their needs within our portfolio.

Investment in property is not a new concept for most investors. The difference is that an H&G property provides a real ‘Freed Hold’ asset since the investment is tangible, being bricks and mortar. Furthermore, the rents from property are likely to be fixed and tend to increase over time, providing a real alternative to equities and corporate bond funds with their underlying volatility and large downside risk.

In recent years, the demand for both residential and commercial property investment, internationally and in the UK, has been very high, driving down the income yields these assets produce. In addition, most property funds in the UK do not offer an income option as the returns are linked to the growth of the assets within a fund with an underlying financial instrument.

The H&G property portfolio is very different to many other property investments currently available, but before moving on please remember the following:

As a member of H&Gs BMV (Below Market Value) property portfolio, you will be investing an amount of money into a ‘Freehold’ property which you will own outright. Therefore, the property is yours to do with as you please. If you choose not to opt in to the rental/managed property scheme, you will be expected to organise your own rentals, cleaning and maintenance routines. You will also need to employ a person/company to book your guests in and out of your property/s if you are renting for an income (a rental yield).

By buying Freeh, you will negate a lot of the risks involved in buying property abroad. However, please ensure that you take solid advice if you are uncertain about any aspect of our BMV portfolio.

Key points:

The H&G BMV property portfolio aims to deliver an attractive level of income together with the potential for large capital growth from investment from a diversified Spanish residential property portfolio. The portfolio offers investors prime exposure to freehold ‘Spanish Bank Repossession Property’ acquired by H&G at up to 50% BMV (below market value). H&G has exclusive property within its portfolio, which has a purchase price that starts as low as £30,000 pounds only.

The H&G property portfolio is finite; in other words, the number of properties that we have is small and exclusive, and we are only offered around 33 properties a month by our colleagues in Spain. If you have been looking at Spanish property, there can be no more excuses for not dipping your toe into the water. We have property which is affordable to almost any class of person. If you have found the cost of a Spanish holiday home prohibitive in the past, H&G may just be what you are looking for.

We believe that the properties within the H&G property portfolio are the perfect pension hedge or first-time purchase for clients trying to enter the market. So, starting with a small purchase will not make you a millionaire overnight, but it will not bankrupt you, either. It should be used as a marker for future business and, as you grow in confidence, you may wish to look at more expensive properties. We have tried to simplify the whole process, making it transparent, easier and safer for you to do business with us.

The Spanish property bubble:

It has been said that, during a bubble pop, prices always return to their place of origin. This makes sense, as the price one pays for something, once bubble psychology is removed from the equation, is tied to the actual utility received from having the item. That level is most likely the point at which prices diverged from the norm.

Spain has already paid the price for being part of the Eurozone. The bubble went pop, in a very big way. Let us accept it and move on. Spain has gone through her slump and there has been some bloodletting at the banks. In our view, the property prices are very, very low right now, which means that they will only go in one of two directions soon, namely upwards or sideways. We doubt that they will fall further. Can we guarantee it? No, but anyone studying the market will see the green shoots of recovery happening in Spain.

For practical purposes, trying to define a bottom of the market is pure folly. In the reality of the market, some areas will find a bottom, while others continue to slide – a phenomenon that is already occurring in Greece, for example. The idea of an identifiable bottom is a myth, nothing more than fodder for pundits and analysts. And, if the market did bottom out – and I mean totally – that would be the end of Spain’s entire banking system. Therefore, the Spanish government would not allow the market to hit rock bottom in any case. There is a big difference between a market that has reached bottom and a functioning market. In a functioning market, sales are occurring, homes are appropriately priced and lenders are supporting purchases. A normal market exists when a well-priced, well-located property finds a buyer in a reasonable amount of time.

As we know this trend is starting to reverse itself at present, and as we know the property market is cyclical, so the property market in Spain will return to its former levels in the same way that other world markets have done. As sure as eggs is eggs, the market will rise and, in some areas of Spain, it is already on the move. This is a fact.

The Spanish property market will return to the levels of 2006/7 before too long in some areas. As a current example, the Marbella property market is already heading towards a year-high for August and has grown by 6% in the last two years alone. As long as the properties that you purchase are in a good location, they should rent for between 30/35 weeks of the year in the holiday sector.

If you had already purchased a BMV property, at 8% capital growth, you would already have made a healthy capital return if you had chosen to re-sell it today.

(Remember, the tourism levels in Spain remained unchanged during the crisis. Most hotels, villas and holiday lets were all around 97% full, and this has never changed. The reason for the crisis in Spain was Spain’s link to the Euro, ridiculous interest rates and the banking system’s lending policies. It had nothing to do with declining numbers of tourists. People will always take holidays, come hell or high water.)

Supply and Demand:

Supply and demand pressures have changed prices in Spain significantly in recent months. With high volatility in other markets, some of the very big investment houses have deduced that Spanish property has the potential to be big and return very good profits to their clients. JP Morgan, to name just one very influential house, has invested an estimated $60+ million dollars in Spanish property assets recently. This is a very good sign of a market set to move.

The Benefits of buying BMV property:

  • The potential for strong and predictable upside returns
  • The opportunity to receive an ongoing quarterly rental income
  • Excellent long-term capital growth prospects
  • Exposure to an asset that will bring diversification to your retirement or property portfolio
  • The expertise of working with a well-resourced, professional and highly experienced team
  • Options to invest in Free Hold properties, without multiple owners
  • The chance to achieve overseas property exposure
  • The flexibility to take your rental profits and spend them as you wish
  • There is no limit to the amount of property you may purchase.


Building your property portfolio:

  1. The aim of your property purchase should be to produce an attractive yield and capital return over the lifetime of the purchase.
  2. You should try to deliver a steady level of rental income for yourself from your BMV property purchase. This should be done via a planned rental mechanism scheme, enabling each property to be marketed to holidaymakers and/or private shorthold tenants. This will ensure that, while you wait for the markets to return to their optimum re-sale levels, you will have an excellent pension hedge or an income that you can utilise for other things.
  3. You should seek to deliver an attractive level of tax-advantaged components within the income/rental yield vehicle by placing some elements of your purchase into a trust or other tax-efficient, legal mechanism.
  4. You should attempt to produce a stable income stream which is at least 3% per annum above the average Commonwealth Government 5/10 year bond yield. Try and calculate this on a rolling basis over the previous 5-year period (Fund/Cash Yield Benchmark). This will result in your purchase being a far better retirement planning strategy than any other UK share/bond strategies available from the UK government or any of the slick stockbrokers in the City of London.

The H&G property portfolio is comprised solely of Spanish bank repossession property, including the Canary Islands, the Balearics and her associated islands.

Market exposure:

The H&G portfolio not only offers exposure to a diverse portfolio of Spanish residential property, but it also offers a high level of rental income, paid quarterly to every member who opts into the H&G rental programme. This not mandatory, as you could organise your own holiday rentals. Investors will also gain exposure to a rare asset class that is usually not accessible to the general public, where BMV is hard to find. Yes, every man and his dog purports to have it, but very few do.

Our clients will also gain exposure to an asset class that is a finite resource; all H&G portfolio members are afforded exposure to a niche, once in a lifetime property opportunity. Because our portfolio has equity built into it from day one, it is a very attractive proposition for the first-time property investor, someone looking for a retirement home, or the professional looking to take advantage of the market.

So, doing well in this emerging market is a matter of timing, not a matter of luck. H&G are experts in the property investment sector; all of our property has a real chance of returning exceptional capital profits in the short, medium and long term.

H&G’s property portfolio is a great way of securing an attractive Spanish property, and a reliable income. With the Spanish economy starting to show the first economic green shoots of real growth, the first signs of real recovery in 10 years, the prospects for fantastic upside capital growth are looking even brighter today.

Market analysis:

We have separated ourselves from the competition by utilising both a traditional property investment strategy and a limited amount of modern strategic property analyses, driven by algorithmic market technology to stay ahead of the property market movements/trends.

As an experienced legal consultancy, H&G believe that the Spanish property market can be forecast, whereas the London City-based investment houses cannot really forecast the UK or world-wide markets with any real certainty. “If Stock Market Experts could forecast the market with certainty, they would be buying stock, not selling advice.” The City does not appear to be very good at forecasting profits in any areas these days. Recent history has demonstrated that the so-called City experts have nothing to teach us about healthy, honest investment returns.


The old adage of location, location and location still rings true in property, and Spanish property is no exception to the rule. This said, we believe that there is a place for looking to emerging market areas in Spain with an open mind and a keen eye. The land behind the town of Malaga is a perfect example of a market set to grow as Malaga town expands away from the sea and into the hills. The Canary Islands are another; in Gran Canaria, much of the interior is now a designated nature reserve, with building bans. Property is a finite resource and the prices are on the move.

Market reports:

The market reports that we pass on to our clients will be of significant importance to you. They will keep you up to speed and allow you to follow the market trends. We will impart privileged information supplied to us by our trusted colleagues working in the various planning departments in and around Spain. However, our skill base is not just limited to local intelligence alone, as we also have access to National Planning Authorities’ intelligence and planning forecasts. Sometimes, it is not what you know, but who you know that counts.

Knee-jerk reactions:

Having good reliable information will keep you well informed and abreast of the geo-political events which could actually affect the market in real time. We believe that this is a far superior plan than simply following the crowd, involving yourself in gossip, panics and hear say which has no foundation in reality. Applying the usual knee jerk reaction techniques to short term minor market events is never a very good idea.

Regular surveys:

You should have regular valuation surveys done. H&G utilise the services of highly-qualified surveyors; our Spanish surveyors prepare detailed, regular and up-to-date surveys which allow us to produce our portfolio reports. Our colleagues at the banks also provide extensive details concerning potential Yield and Capital Returns. This allows H&G to consider the market before giving advice. In turn, this will enable you to build the most profitable and appropriate property portfolio in each area of Spain and her associated islands.

You may organise your own regular valuation surveys or we could organise them for you. Once again, we want to simplify things for our clients.

Having regular surveys done will afford you peace of mind. It will keep you well informed and allow you to follow the market trends. It also allows you to stay one step ahead of the game.

In our humble opinion, all property investment companies should help their clients to produce up-to-date valuations. Very few can be bothered to do so.


Timing is critical, as far too many investors enter the property market like sheep, simply following the socioeconomic trends. They enter at the top of the market and exit at the bottom; this is complete nonsense and financial suicide.

By acquiring your property at BMV and entering the market at the correct time, which is at the bottom of a rising market as opposed to the top of a falling market – or in no man’s land, being the middle – you take a strong market position, which is a good thing. By doing things correctly, you will stay in control; you do not want the markets to do cartwheels, perform miracles or go on a crazy bull run. Because you entered at the correct time, the market needs to return to its normal level; and, when it does, all things being equal, you will sell for a healthy profit.

If you are buying for capital gain, do not become emotionally attached to the property and look to maximize your ROI wherever and whenever you can.

Forward sales:

H&G have taken a stock market technique and redesigned it to fit our BMV property portfolio.

This is the idea: In finance, a forward contract (or simply a forward) is a non-standardized contract between two parties to buy or to sell an asset at a specified future time at a price agreed upon today. The price agreed upon is called the delivery price, which is equal to the forward price at the time the contract is entered into.

The idea is not to take every last drop of profit out of your property, but to leave a little in the property and allow another person to benefit from your great wisdom. This means that you have an advantage over other sellers in the market and which, in turn, will make your property more attractive to any interested party.

As an example: You buy at 30% BMV and over a period of, say, four years you have had a very lucrative rental programme in place. The market has risen and you have the latest valuation survey in your hand stating that the property is valued at a price that is 20% more than the original purchase price, leaving you 10% still in the deal.

You now instruct H&G to find a buyer actively searching for a good property investment.

Armed with your regular valuation surveys, and evidence of the original purchase price, you are in position A.

We find you a buyer and agree to sell the property to them within one year, via a forward sales contract.

You accept a deposit of, say, 50% of the purchase price, today.

You get the benefit of one last year of rental income.

Your buyer gets the peace of mind that he/she can still get into the market at a discounted price, and the buyer also has a guaranteed rental return to look forward to from day one.


You have done very nicely, with a 20% capital return on your investment, 5 years of rental yield and a large 50% deposit in your pocket.

It’s a win, win situation.

H&G’s client care:

H&G are already taking steps to meet the specific needs of all of our valued clients. In addition to the other usual suspects not giving good intelligence to their clients, bad alternative investment vehicles appear to be springing up at the front desk of many established banking houses.

In our opinion, none of them are of much use to you. Practically any kind of business represents an opportunity for some so-called City experts. Only a very small percentage of them appear to be intelligently constructed and well thought through. In contrast, a well-planned property purchase will be uniquely positioned to help you realise healthy returns. But, it is not simply down to luck; it takes expert legal advice by professionals who understand the property markets, timing and a little nerve.

Once again, our research has indicated that many clients actually prefer investments in immovable property to any other investment. The down side has always been the hassle of locking away large sums of money, or taking on huge mortgages and being a landlord coupled with doing the on-going maintenance, collecting rental fees, inventory checks, and booking folks in and out of the accommodation if it’s a holiday let.

The upside of working with H&G is that we can do all of this for you and, of course, property investments do not blink out overnight. History has taught us that property is a solid, sensible, tangible investment that always provides a steady income.

The Investment Risk v Reward Paradigm:

We are not afraid to admit that we know there is a very small risk of failure, if you can call only getting back the same amount of money which you originally invested, plus your rental payments, minus admin fees, a failure, that is. We are, however, preparing ahead of time and employing control measures which should guarantee success for all of our clients.”

Controlling risk is the number one objective for every member of our highly experienced team. Our focus is firmly fixed upon minimising the financial downside and maximising the upside.

Our client exit strategies have been developed prior to you entering the market, in order to control exposure and limit losses. Every member of the team at H&G is extremely risk-averse and we all understand that this means going the extra mile for every client.

As we have stated several times in earlier paragraphs, our aim is to ensure that all of your property from the banks are at BMV (below market value). Therefore, we can be certain that, if the market moves back up towards the highs of pre-recession Spain, you will make a healthy profit. We simply do not know at this juncture where the prices will end up, but they should be up by a considerable amount. What we can predict, however, is that, all things being equal, we should do well.

The strategy is quite straightforward: we get in at the bottom of the market and we exit at the top of the market.

Risk management:

The amount of money invested and placed at risk is part of the allocation decision-making process. It has often been suggested by financial experts not to risk more than 3-5% of an account on any one investment for long-term survival. We have slightly different views on this.

The amount of risk relative to desired reward is an important factor when planning an investment exit strategy, we concur. If someone foolishly risks £10 for every £1 of profit, it will only take a couple of losing trades to wipe out a large number of the profitable ones; this is quite obviously not a good thing. So, the basic risk/reward ratio is used to compare the expected returns of an investment to the amount of risk undertaken. Therefore, the balance of the risk/reward ratio will vary depending on many factors, including the investment strategy and time horizons involved. In our case, the maximum fund length is six years; however, we will have multiple funds running simultaneously, so you may wish to invest in a short, medium and long-term fund, which is designed to hedge your position in the market place.

As an example for some clients, a 2-to-1 minimum is a criterion that must be met for extremely risk-averse trading candidates. Very simply, the reward is twice as much as is risked on an investment in this instance. With this result, the percentage required to be correct is less for an overall profitable outcome. However, the reward would presumably be relatively low, also.

Simple mathematics dictates that you cannot put in a little and get a lot out of any investment. Do not let anyone tell you otherwise, as it’s simply not true. Some Bonds and Penny stocks are extremely safe, but they tend to yield very little profit. Although where you place yourself in the market place is really a private decision, we are on hand to advise you should you wish to take our expert advice about risk.

Silver lining:

The silver lining is thus: if you take holidays, your accommodation is free, your family’s accommodation is free. Your property is being paid for by your holiday rental guests.

The average price of a family holiday for four is somewhere in the region of £2,300. For your family, friends and extended family, they only have to pay for the flights, food and drinks. A two-hour flight from England to Spain costs roughly £80.

The property is yours to live in, rent out for profit and sell on when the time is right.

The exit strategy:

As already stated, our strategy doesn’t provide perfect protection, but owning the freeholds and having the ability to sell, rent and forward sell individual units in your portfolio at any given time allows you to be flexible. And flexibility is the key. The benefit to you should be obvious. This type of strategy is surely the first intelligent step towards managing the risks involved in investing in foreign property.

Some investors pay no attention to their exit strategy at all. As long as they are in the property market, or on the property ladder, all will be well. This is, unfortunately, total nonsense. The help to buy scheme will prove our point once the UK interest rates go up in early 2016. Market analysts suspect that the USA will raise her rates in September 2015, while we suspect that the current Conservative government will not risk raising the UK rates until next year. However, when it happens, there will be a mini meltdown in the UK property market. The government’s 10-year Bond will also start to lose its attraction.

Your exit from the market will have been developed as part of a money management plan, carefully developed to ensure that no individual investment jeopardises the health of the whole portfolio. As already stated, if one property is flying from a profit perspective, you could forward sell it; if another is not performing well, you simply leave it in the rental market until you observe some more market movement. A worst case scenario is that you break even on a badly performing property at the resale point, but you should not lose money due to the initial BMV purchase and the rental yield that the property generated for you.


It all sounds very logical, doesn’t it? However, how many people do you know have elected to enter the London property bubble recently, at the top of the market? Our view on this strategy is very straightforward and does not require any complicated mathematics. When the interest rates go up now that the general election has taken place, with inflation kicking in hampering growth, the reaction will be fear; fear will lead to an interest rate hike and some of the help to buys and buy to lets will feel the squeeze. Who believed that 5% was normal, in the first instance?

Investors will look for a safe haven. The price of gold is very low, and this could be a good call; it is the go to port during the storm. Regardless of where people go to, however, London will experience a mini pop. Mr Osbourne may continue to massage the figures and, if he does, London’s property investors may get away with it for a little longer; but there is inflation trouble ahead, that’s for certain. The words “Help to Buy” gave the game away a little, in the first instance.

This said, H&G’s Spanish property investment strategy is not absolute protection against world economic factors and geo-political suicide. The City or the Eurozone in general could be hiding the next big problem. There is no such thing as absolute security. But we believe that our BMV property is as close as it gets to being risk-averse.

Nor can we protect investors from jumping into the next big thing and ignoring our expert advice. We are 100% certain that some people, after reading our literature, will use it as BBQ fuel and simply return blindly to the same so-called lucrative London City markets.

What we do know, however, is this: the other markets and market events cannot cause any major problems to your BMV property purchase now. Our market has already bottomed out. The damage has already occurred; it is done and dusted. In H&G’s humble opinion, our market can only move two ways – sideways or upwards.

Nor can the usual market insanity wipe out your property investments overnight; your investments will not blink out on a big screen, as the traders watch helplessly. You benefit from having your money invested in a real, tangible, usable, rentable medium. You are invested in BMV property which exists, and not simply on a computer screen.

You are in at the right time, at the bottom of a rising market. Your aim is to get out at the top, or as close to it as you wish to.

As a client of H&G you have the choice and freedom to invest in a plethora of property investments, big or small; you are at liberty to select whatever and whichever property investment fits your personal goals, money management, and risk and lifestyle parameters. While the execution of a disciplined property investment strategy can always be refined for better results, we believe that we have the makings of a safe, niche and profitable property investment, which all of our clients should appreciate.

We have a well-educated, professional and experienced team and the safety net of unbiased expert advice from independent Spanish banks, Spanish and English legal counsel, accountants and investment market experts.

We will help you construct a solid exit plan which, in turn, will help you reap the benefits of being ahead of the game. We will assist and advise you on how to take the current opportunity and avoid the pitfalls of a negative outcome.

Most individual investors, who invested their pensions in the usual City markets, must now wish they had implemented a plan prior to being put into a poor position (usually by their slick, City stockbroker). They were forced to act because of the market crash, and many were forced to take a very cold bath indeed.

While the risk/reward ratios required to be successful may differ, H&G believe that those who employ a well thought out investment plan can maintain a more consistent approach to the markets and their investments, regardless of the market. H&G have conducted a great deal of research and we are well aware that there are some very small risks involved. We do not shrink from our obligations. But we firmly believe that this is a property investment opportunity, which is bound to succeed. We have very strong support from our friends at the Spanish banks and we understand our own market place.

So, the facts are very straightforward:

“You get recessions, and you have market declines. This is the nature of property investment; the property market suffers from bubbles-period. Accept it. If you don’t understand that this is going to happen, then you’re not ready to become an investor in property at any level or at all. Buy an annuity or some other pension hedge. You will not do well in any of the world’s property markets. In order to do well in any form of property investing, you must be opportunistic, work out what creates value. Work out where the bottom of the market is, what creates incremental value and in what combinations. And once you have worked it out you need to invest at the right time. We believe that this is our single most important piece of advice. Invest at the right time. It’s not rocket science!”

Yes, the thought of investing in a Spanish BMV property may be a little scary, but please do not manufacture a crisis where none exists. Fear doesn’t drive change − but it does perpetuate mediocrity.

We hope that the information provided has been of help to you. Please do not hesitate to contact a member of the team, or to arrange a meeting to discuss meeting at Wadenhoe House for lunch on H&G. We would be more than happy to discuss all aspects of the H&G property opportunity with you during your visit.

We look forward to working with you in the very near future.


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