UK vs Spain for starting out?

Question

Hi! I'm a Spanish resident living in Barcelona but I'm a UK citizen. I'm looking for my first property investment deal. We have €170k within a gross income of €200k/annum.

Ideally I'd like to the BRRR model but in Spain this seems really difficult both because of the low LTV required by the banks and also the banks' reluctance to offer refinancing. We're also considering flipping if this model works better here.

In the UK things look far easier, there's potentially 95% LTV and refinancing is possible, but then there's the high interest rates on the mortgages.

Which of these markets would be easier to get started?

Basit Siddiqi · Answer

Easier financing does make things more expensive.

So while the financing is easier in UK, I would have to guess, on average, houses are more expensive, in the UK.

Sometimes, it is better to do things that are harder / less competition.

I am hearing less and less people mentioning about moving to the UK.
London and a lot of cities are gloomy with few months of sunshine.

People want to move where there is sun and people can live a comfortable life.

I would invest in Spain before the UK, even if financing is more difficult.

Mike Lambert · Answer

@Basit Siddiqi

Yes, Spain is generally more attractive than the UK for most people, among other things for the reasons you mentioned and also properties are much cheaper generally speaking.

I haven't tried to get a mortgage in the UK but I highly suspect it's actually easier for a foreigner to get one in Spain, where it's actually quite easy, provided that you're creditworthy of course.

Erwin Groenendijk · Answer

@Oliver Searle-Barnes, good to hear. It will help you to get a direction with all the other people attending the meetup.

Mike is talking often about short term rentals in the South of Spain and we are developing and managing many of them in Valencia. Both markets work really well and give above market average results.

Erwin Groenendijk · Answer

@Mike Lambert they made everyone believe it is because of the huge number of short-term rentals, while it represents just a little bit over 1% of the total housing market.

The graph below is from Valencia and is in line with Barcelona:

In line with what you are saying, the ban that they are still appealing against in Barcelona will not change the amount of tourists visiting the city, nor have an impact on the housing market or bring property prices down. At most, it favours the hotels in the city and its surroundings, charging higher prices. The same happened in New York in the last years by the way, with hotel prices increasing 100-200%.

Mike Lambert · Answer

@Oliver Searle-Barnes

If I'm not mistaken, the main reason behind Barcelona's short-term regulations is the lack of affordable housing, while the huge number of short-term rental properties was supposed to make worse. This is a situation similar to that of so many European and North American cities a like. While tourism is important to the city, there are many other industries and I don't necessarily think the ban will decrease the number of tourists and many locals are complaining about the overtourism anyway it might not be such a bad thing if the numbers decline a bit.

As Erwin suggested, there are areas that are indeed more favorable for short-term rentals. For example, when we started buying in the Costa del Sol by buying a first holiday villa in a small town, we figured out that:- There is no lodging crisis like in the big cities like Barcelona;- Even if there was a lodging crisis, the people who are victim of it would couldn't to buy or rent that kind of property anyway;- Tourism and second home owners are very important to the local economy.

There is a logic behind which areas are more favourable. Of course, politicians sometimes might take illogical decisions although they can't do what they want if they want to be reelected. In any case, if push came to shove and unfavourable regulations were enacted, there is a very active second home market there and the area is very desirable to nationals and foreigners alike so you have a plan B there.

Benjamin Louie · Answer

@Oliver Searle-Barnes  Sounds like you’re in a great position to get started. You’re right, BRRR is tough in Spain with the low LTVs and refi limits. Flipping might be a better fit locally if you can find the right deal.

The UK is more investor-friendly with financing, but the higher interest rates can eat into cash flow or margins.

If you're aiming to scale faster, the UK might be the move. But if you want a lower-risk first deal closer to home, a flip in Spain could be a solid start.

Erwin Groenendijk · Answer

Hi @Oliver Searle-Barnes, I would make it more practical. Are you planning to stay in Barcelona for the upcoming time? If yes, I would advise doing it somewhere where you are relatively close to be able to visit it. Just for the sake of being able to go there and check it out when you want.

If you have family in the UK and would like to invest close to where they live, that is also a possibility. Or connect with a project manager who could take care of it.

Forget about analyzing both countries in detail for the moment, both have their pro's and con's and success can be achieved in both countries. When you are starting out, starting is the most important, and you will need to overcome downsides anyways.

It is true though that with that amount of money and salary, you could think of diversifying into two different properties

Mike Lambert · Answer

@Oliver Searle-Barnes

A few points that might help with your reflection / decision making:

1. The BRRR method only makes sense when interest rates are low. As you mentioned, they're high in the UK.

2. Whatever strategy you end up using, BRRR or otherwise, the main determinant of wealth building in real estate is the level of interest rates. That's one of the main reasons why I invest in the EU, not the UK. There's no contest in my book.

3. The fact that you have UK citizenship is no advantage for investing in the UK in that foreigners aren't restricted to do the same as what you would do. Of course, if you have knowledge, family and/or connections there who can help, it would definitely make a difference.

4. Otherwise, if you consider investing away from home, why limiting yourself to the UK? There are other countries where you can use the BRRR method.

5. Countries like Spain and Portugal are experiencing a huge surge in tourism so short-term rentals is an alternative lucrative opportunity (and much easier than BRRR), but not in Barcelona obviously.

Hope this helps.

Jonathan Ilunga · Answer

Hi Oliver,

Thank you for sharing the details of your situation — you’re in a strong position with both your income and available capital, which gives you flexibility in choosing the right entry point.

You’re absolutely right in noting the structural differences between Spain and the UK:

• Spain: The BRRR model is challenging because of the conservative lending environment — banks tend to cap LTVs (often 60–70%) and are cautious about refinancing, especially on short timelines. That makes flips or straightforward buy-to-hold investments more viable strategies locally, particularly if you target undervalued or distressed properties where you can add value without depending heavily on leverage.
• UK: Despite higher interest rates, the financing environment is much friendlier to BRRR. The fact that 75–95% LTVs and refinancing are possible gives you more leverage to grow your portfolio faster. However, you’ll need to stress-test deals against higher mortgage costs to make sure the cash flow still works.

Spain: The BRRR model is challenging because of the conservative lending environment — banks tend to cap LTVs (often 60–70%) and are cautious about refinancing, especially on short timelines. That makes flips or straightforward buy-to-hold investments more viable strategies locally, particularly if you target undervalued or distressed properties where you can add value without depending heavily on leverage.

UK: Despite higher interest rates, the financing environment is much friendlier to BRRR. The fact that 75–95% LTVs and refinancing are possible gives you more leverage to grow your portfolio faster. However, you’ll need to stress-test deals against higher mortgage costs to make sure the cash flow still works.

In terms of ease of starting:

•  If you want to maximize leverage and build a scalable portfolio quickly, the UK is structurally better despite interest rates.
•  If your goal is stability and testing the waters with lower risk, Spain may be better for a first project — especially a flip or value-add that doesn’t rely on refinancing.

If you want to maximize leverage and build a scalable portfolio quickly, the UK is structurally better despite interest rates.

If your goal is stability and testing the waters with lower risk, Spain may be better for a first project — especially a flip or value-add that doesn’t rely on refinancing.

Given your strong income and capital position, you could even explore a dual-track approach: a pilot project in Spain to gain experience and minimize currency/mortgage risk, while planning a more aggressive BRRR-focused strategy in the UK once rates stabilize or you’ve established your investment framework.

Would you like me to break down a side-by-side scenario analysis (Spain vs UK) using your €170k capital — for example, what type of property you could realistically acquire under each model, expected returns, and key risks?

Oliver Searle-Barnes · Answer

Thank you everyone for your thoughts, it gave us a lot to think about this past week.

Regarding our goal, we’re looking to build up our assets with a view to generating a pension income long term (approx 15 years).

1. Short term rentals in Spain seem very regulated now, is it a matter of persistence with licences and approval from the community or are there still regions where it’s a bit easier? Are there areas in Spain which are still more favourable for short term rentals?

2. The BRRR model in the UK seems best aligned with our long term goals but as @Mike Lambert mentions the interest rates are high at the moment. We’re considering loft conversions/extensions to maximise the capital gain. Would this make BRRR more doable with the current interest rates?

@Jonathan Ilungaa thank you for offering to do a side by side break down, this would be really helpful so we’d love to see that.

@Erwin Groenendijk we hear you on the practical side of things. We’ll get to the meet-up in Barcelona to hear more from people on the ground.

UK vs Spain for starting out?

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