ALTHOUGH the UK's mortgage rate has been rising, the situation in Spain is very different.

Banco Halifax Hispania (BHH), the Spanish arm of Halifax plc, has reduced the interest rate charged on its Spanish mortgages.

The new rates are 3.055% for loans below 60% of the valuation of the property and 3.305% for loans between 60% and 70%. All mortgages from BHH are in Euros and secured against the Spanish property.

According to the Office for National Statistics, an estimated 300,000 people move abroad to work each year.

With a 14 million strong expatriate community, Spain is now the most favoured European country for Brits and The Halifax is continuing to report an increase in demand for property in Spain, particularly within the popular ex-patriate areas of Costa Blanca, Costa Calida and Costa del Sol.

To help customers understand the Spanish house buying process, discuss the financial options available to them and facilitate the house purchase from the comfort of their own home, BHH has put several initiatives in place, including the provision of an English speaking helpline within the UK.

BHH guides customers through the house purchase process by providing information from the General Land Register, including the current situation with the property and its owners, as well as any pending charges. In addition, once a suitable property has been identified, BHH can arrange for external reports covering the house and it's market price.

In some areas of Spain, BHH also provides legal and tax advice through a panel of external solicitors to assist with the house purchase, obtaining a resident certificate and help with other paperwork.

Commenting on the reduction in interest rates, Ian Smith, Head of European Operations at Halifax plc, said: “When it comes to owning that holiday home in the sun, Spain is certainly the favoured location with British people, so this latest reduction in interest rates is really good news.

"The demand for Spanish mortgages has increased significantly over recent years to the extent that we now have a specialist team operating in the UK to deal with those customers who want to arrange mortgage finance before they even arrive in Spain."

With the dream of moving to Spain about to become a reality, BHH recommends that anyone considering buying a property abroad makes the following personal arrangements before they leave the UK:

* Obtain all necessary up-to-date documentation, including visas and work permits.

* Ensure that you have registered your residency status with both the Inland Revenue in the UK and the appropriate authorities in the country you are moving to.

* Check medical arrangements.

* Consult a tax specialist.

* Arrange bank accounts in the country you are moving to.

* Ensure that any regular payments in the UK are met while you are abroad and let your bank know about the move.

* Decide what you want to do with your home in the UK.

* Advise insurance companies about changes that might affect policies, including buildings and contents cover, health insurance and pensions.

* Tell everyone about your change of address.

* Check your will and make sure it takes into account rules in the country where you will be living and any inheritance tax rules that might apply.

* Make sure that you arrange furniture shipments well in advance.

* Remember electrical items may not work abroad.