Spain’s £9.5 billion lifeline

As Spain's housing sector continues to struggle in the downturn, the Spanish Government is pouring £9.5 billion into helping home-seekers buy or rent more than one million homes over the next four years...

This is the latest helping hand from a Government that is desperately trying to stave off a crisis. The Spanish property market has been one of the hardest hit by the downturn as it emerged from its ten year housing boom earlier this year.

Previous efforts by the Government to bail out the ailing housing sector include tax breaks, low-cost loans and public works spending.

It launched a plan in September totaling a whopping £39 billion to help the country's banking system, something that could help raise liquidity in the property market.

Prime Minister Jose Luis Rodriguez Zapatero said this measure would be used to buy up high-quality assets and would work in conjunction with the provision of additional liquidity by the European Central Bank.

Such measures may help boost liquidity and in doing so increase mortgage availability in the country, something that could benefit those looking to the Spanish property market for their overseas investments.

The Prime Minister also announced that developers renting out their properties would get tax breaks and a share of a £2.38 billion credit line.

He said, "These are concrete moves to make the property sector more competitive at the same time as we encourage the rental market and provide liquidity to companies with big stocks of property assets."

You scream, I scream, we all scream for new scheme

Under the new plan, the Spanish Government will strive to help the poorest families, the elderly, young people, the disabled and victims of domestic violence to find a home by giving subsidies to developers.

They are handing out the cash to developers in order to help the struggling construction industry, which has experienced one of its worst ever years.

Some developers have been unable to keep their heads above water and have been forced to file for administration - such as Martinsa Fadesa, which was at one point Spain's biggest builder.

The new scheme aims to dedicate a third more housing provision than the previous draft and would increase the number of homes available by around 380,000.

Picture by Jordi Armengol