It is one of the most desirable places to live in Spain with property prices spiralling. But now fraudsters are making thousands out of unsuspecting expats or tourists looking for somewhere to live in Barcelona.

The Barrio Gotic is one of the most sought-after addresses

Walk around some of the most fashionable areas of Barcelona and you see them hanging from every other window.

"To Rent for Weeks" read the signs, with a mobile phone number underneath. There is never a company name with these adverts - because there are no companies behind them.

The prices range from EUR 3,360 per month for a 75 sq m apartment in La Ribera, a hip part of the city centre, or EUR 1,680 per month for a room with two beds in the Barrio Gotic, another sought-after address.

Another example is a tiny flat measuring just 50 sq m off Las Ramblas, the most famous street in Barcelona, which is rented for EUR 120 per day. Only two people can stay there, otherwise you have to pay EUR 20 more for each person extra.

The people behind these flats are the sharks who are making a killing from the property market in the Catalan capital, exploiting newly-arrived expats and tourists.

They are not well-organised or ruthless estate agents; rather they are property-owners who may own one or two flats who want to capitalise on the spiralling demand for
places to live in Barcelona.

They use the cash from one tiny flat in the city centre to pay for much bigger apartments in the fast-growing suburbs such as Poble Nou, in the east of Barcelona. 

To put this trade into context, you can rent a flat of 390 sq m in Turo Parc, one of the smartest but not particularly fashionable areas of the city, for EUR 1,860 per month.

To taste the market at first hand, I ring a number and pose as a prospective client keen to rent a flat in another one of the most desirable parts the city, El Born.

"You pay in cash only. If you need a bill then we cannot do it and you will have to look elsewhere," I am told briskly.

When I ask another flat owner about his company, there was a curt response: "You simply pay us on contact and we don't make bills, not even bank transfers or credit cards."

Property owners should give tenants a written bill

There are, of course, laws brought in by the regional government of Catalonia to regulate estate agents or property owners. They stipulate, among other things, that bills and VAT are norms.

One law introduced last year regulates the prices for flats rented to foreigners in Catalonia.

It also states proprietors must provide a written bill, stating the name of the person renting the flat, the name of the owner, the number of people living there and the date of entry and exit.

Apart from the exorbitant prices, it has become common among this new breed of property owner to ask for a 20 percent deposit up-front. This averages out at least EUR 200.

There is, perhaps, nothing wrong with asking for deposits. But when the unwitting customer has no paperwork to guarantee they get their money back, they are open to being swindled.

Another practice is to rent flats by the day. Here internet companies like www.flatsbydays.com have expanded outside of Barcelona and rent places across Spain, in Seville and Granada, among other cities.

David Glatz, managing director, said: "We do everything to ensure we work by the law, but it is true that there are many people who work secretly and this has a negative effect on our work because we pay taxes and there are people who cheat."

Glatz says there are some proprietors who cheat customers by asking for more to   clean flats – something they should do anyway – or to allow customers to rent the flat later than agreed.

House prices soaring

Fraudsters are exploiting a housing boom which still shows no signs of cooling down.
A survey last month showed a 17 percent rise in the price of houses over the past 12 months.

 Madrid and Barcelona have the biggest increases on the Spanish mainland, with rises of 134 percent and 115 percent respectively.

The smallest average increases were in Galicia in north-west Spain and Extremadura in western Spain.

According to an analysis of the market by the company Property Assessments (TINSA), new homes now cost on average EUR 1,682 per square metre.   
 
The average cost of 'second-hand' homes is now EUR 1,389 per square metre.
This means it is harder for Spaniards to buy homes.

A report from the Catalan Observatory on housing found only 42 percent of those aged between 20 and 34 do not live with their parents.

With more Spaniards anxious to leave the nest, perhaps the pressures to use a family property to buy another flat might be growing.

But some might worry that this trade might provoke a backlash against Barcelona among tourists and those who might have wanted to make it home.

May 2004

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Subject: Living in Spain, housing in Barcelona