Why VPO is a Big VP No

VPO = Vivienda de Protección Oficial

When you are looking to buy a property in Valencia at the cheaper end of the market you might find that your choice is a bit restricted as prices have risen considerably in the last few years. We have talked in the past in these pages about how it's difficult to find anything with basic requirements in the city for under 150k and maybe even 180k, especially if it's relatively central. It has now become even more difficult because of a new law that came out in July of which we are just starting to see the results. If you are not aware of what a VPO property is then you need to read on.

What Is a VPO?

VPO stands for "Vivienda de Protección Oficial" (Officially protected property) It's the equivalent of council or social housing and was extremely common in the 60s to the 80s in Spain but still exists today and more VPOs are built each year.

The theory behind VPO was that it offered affordable housing for those struggling to afford property in the open market. Prices were controlled, price rises on the property were limited to the official inflation rate and transfer of the property depended on certain criteria. Owners of VPOs could always sell their property but they were limited in the price they could ask and councils had first option on the purchase. In many cases this led to an increase in black money changing hands as the price of the property would be fixed by the state but you would have to pay the owner some money in cash if they were to sell it to you as long as the council opted not to purchase.

Prior to the change in the law once a VPO property had passed a certain number of years as VPO in ownership of the same person, 10 years usually, it could be decatalogued as VPO and be sold without the condition in the open market. It was a sort of right to buy law. The change in the law is subtle but has far reaching consequences for our clients.

The Law Change

The changes mean that in order to buy a VPO property you have to be on the list of "demandantes" (those able to opt for buying council houses) and to be a "demandante" you need to earn under a certain amount and have been resident in Spain for over a year*. So foreign buyers can buy but they have to be resident. The majority of our clients come in from other countries so they are not currently resident. They also tend to earn more than the maximum allowed so they are discounted on both counts.

*Now changed so that if you are here because you have been placed here for work purposes and meet all the other requirements that year is not required.

You May Still Be Able to Buy a Previously VPO Property

Here's where we get into the weeds of dates and numbers. Prior to 1968 VPOs were usually for 20 years. Therefore, even if it is still catalogued as VPO now because nobody has bothered to change the coding, it can have this classification taken off the property. It's a simple process and can be done quickly prior to purchase.

From 1968 VPOs were for 30-50 years. Therefore if a property was built between 1968-1973 it may be that it can be declassified if it hasn't been already but anything after 1973 (As I write this) might be VPO until 50 years have passed. Some properties may have been built after 1973 but have already been declassified as VPO before the law change as that could be done after 30 years in many cases if the council didn't exercise the right to buy that they had. In these cases you can buy them.

Why Does This Affect Many People?

If you are looking at the cheaper end of the market many of the properties are in the areas where VPOs were built, because obviously VPOs were built in non-prime areas. Prime areas were largely already established prior to VPOs existing and were more central. VPOs are found in areas where you find property under 200k on the periphery of the city and in less fashionable areas usually. However remember that fashions change and what was a less fashionable area in the 1960s, 70s and 80s may now be very in demand.

A lot of clients therefore have their list of favourites on Idealista and other portals but they are unable to buy many of them. You shouldn't expect to see anything in the listings that suggests the property is VPO though because most agencies want clients to go round before telling them (Or are unaware of the classification and sometimes the new law) Then they can then show the clients other stuff they possibly can buy. I have yet to see a listing with a full explanation that the property is VPO and you have to qualify to be able to buy it or the year when the property will come out of VPO classification.

How It Has Affected Clients Recently?

We get clients looking around this price range and this article will be sent to them when they are looking now to prepare them for the new law. We have already experienced the effects of the law.

In one case just after the law change, one of our clients really liked a place and went to see it and loved it. The agent didn't even know it was VPO. When the lawyer got the "Nota Simple" about the property it was discovered. They couldn't buy it because it came out of VPO in 2024 but not before and the owner wasn't willing to sign a rental with an option to buy after the final date. (Obviously the owner has a problem here too as they want to sell now but their potential pool of buyers is lower as they have to be a Demandante.)

In another our client really liked a place and it still had the classification even though it had changed hands various times prior to the law change and was now owned by a company that specialises in modernisations of older properties. They had bought it before the implementation of the law so could buy it. Luckily the property was from 1962 so the change of classification was easy.

It's Not Just Cheaper Properties

Some VPOs were built in prime areas and are offered for sale now at higher end prices. The restrictions still apply of course on who can buy. Therefore sometimes a property may remain on the market for a long time because there are an extremely low number of potential buyers who can afford it and at the same time are on the list of "Demandantes" They will need a lot of savings or maybe help from the bank of mum and dad or to be recipients of an inheritance or a lottery win. These properties will probably be on the market until the 30-50 years are up or they will be taken off the market due to this classification of VPO further drying up the offer of properties for sale.

It's Not Just The City

Most towns and many villages will also have some or a lot of VPO properties. Some villages that were build as new towns during the Franco period and later may be almost exclusively VPO properties. Knowing whether a property is VPO before visiting is now an essential question. Rest assured that we will only be visiting VPOs in future that can be declassified or already have been.

Property of the Week

There's a good selection of new properties for sale on the website this week. For our Valencia Property of the Week we have chosen this excellently modernised property in the Cabanyal. Read on.

"Cabanyal is an area that is still undergoing a lot of improvement and development, and it can be a bit hit and miss. However this is a great recently modernised apartment, and it's in the really good part of Cabanyal. A few minutes from the port, and similar distance from the beach, on one of the nicest streets. The tram also passes by a couple of blocks away, so you can be in the city centre in 20 minutes.

This apartment has a large bright open living and dining space, with a balcony easily large enough for a table and a couple of chairs. Westerly facing, it catches the evening sun, and the street below has very little traffic to disturb your five o'clock craft beer.

There are 2 double bedrooms, and a third single bedroom. The kitchen is large enough for a breakfast table, and along with the rest of the apartment was renovated just 2 years ago, we know as we did the renvoation. There is also a laundry room, a bathroom and a toilet. The building is well looked after, and in fact the community are in the process of updating the lift. It means a few months of extra payments on your community bill, but it is already half paid off and then you can look forward to your new swanky lift.

Air-conditioning in the living area and fans in the bedrooms keep the apartment nice and cool despite the sunshine. Brand new climalit windows also help. There is a storage locker on the roof terrace to keep the Christmas decorations and the flyboarding gear in the off season.

A classy, comfortable apartment by the beach, or by the port, or in a nice complete neighbourhood with great public transport, whatever you're looking for in a Valencia apartment, this has it."

You can see more of the property including a floor plan, virtual tour and more photos at this link.

Stepping Stone Rentals News

We have uploaded some new properties onto the site this week and changed the availability of others. More and more demand is coming in so we are still looking for more properties of course. If you are looking for or have a property to rent out medium term then let us know. We'll be happy to take a look.

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