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Spanish property market recovery fastest in the Balearic Islands
The Spanish Balearic Islands, which reported some of the lowest house price falls in Spain during the six year economic downturn, is now experiencing the fastest and highest rises in the country. The strong property market is being supported by a healthy tourism sector and a multi-national house buying population, according to Alejandra Vanoli, managing director of Mallorca Sotheby’s International Realty. She pointed out that Calvia alone has 19,000 non-Spanish residents from 100 different countries and this year the firm is selling more houses than ever. In Ibiza it is a similar story. According to Glynn Evans, the firm’s managing director in Ibiza the international buyers are attracted by exciting culinary business ventures from multi-Michelin starred chefs, supercar and powerboat championships, 70 metre plus berths for the finest private mega yachts and several new five star hotels. On top of this, at the end of April, the Bank of Spain confidently declared an end to the property crisis. José Luis Malo de Molina, said that ‘the adjustment in the housing sector, in principle, is complete’ and ‘the process of price adjustment, in principle, has already bottomed out’. The mortgage market is also well into recovery. Data from Spain’s National Institute of Statistics show that property loans in the Balearics, for example, were up 36.2% in February 2015 over the previous year, above the national average of 29.2%. Meanwhile, the Spanish rental sector is also improving. Average rents increased by 0.2% in April, compared to the previous month, to €6.98 per square meter per month, according to the data from property portal Fotocasa, and year on year they increased by 1%. ‘In the last few months we have gone from registering widespread declines in home rental prices, to registering increases in every region except one. Rental prices, therefore, are starting to increase in most of the country,’ the Fotocasa report said. But rents are still down 31.1% since the peak of the rental market in May 2007 when it was €10.12 per square meter per month and all regions have seen serious declines since the peaks before the economic downturn. Rental prices have fallen the most in Aragon with a decline of 41.9%, are down 37.8% in Cantabria, down 36.5% in Valencia, down 35.9% in Castilla-La-Mancha, down 34.8% in Murcia, down 30.5% in Rioja, down 30% in Asturias and down 29.5% in Andalucia, since the peak of the market. However, prices increased in April month on month in all regions except in Castilla-La Mancha where they fell by 0.1%. Rental prices increased the most in La Rioja with growth of 4.2%, they increase by 3% in the Balearic Islands, and by 0.9% in Madrid. Continue reading
Property and building industry welcomes details of UK’s new housing bill
The UK is to see an increase in the supply of new starter homes to be exclusively offered to young first time buyers under the age of 40, it has been announced by the government at the opening of the new parliament. The Queen’s Speech included a number of issues relating to the nation’s property markets which have been met with a positive reaction. The new starter homes for first time buyers will be offered at a 20% discount below their open market value and the current Right to Buy levels of discount will be extended to 1.3 million housing association tenants. To help with the chronic lack of housing local authorities will be required to dispose of high value vacant council houses which would help fund the Right to Buy extension discounts and the building of more affordable homes. The government will also take forward the Right to Build scheme, requiring local planning authorities to support custom and self builders registered in their area in identifying suitable plots of land to build or commission their own home. A statutory register for brownfield land will be introduced to help achieve the target of getting Local Development Orders in place on 90% of suitable brownfield sites by 2020. Along with this the neighbourhood planning system will be simplified and speeded up to support communities that seek to meet local housing and other development needs through neighbourhood planning. The reaction from the property and housing industries has been positive as all agree that there is a pressing need to build hundreds of thousands of new homes across the country and particularly in London. However, Adrian Gill, director of Your Move and Reeds Rains estate agents, questioned whether these new schemes are setting sights high enough. ‘Building a home in Britain is about 18% more expensive than in Ireland, for example. Preliminaries like planning fees account for 12% of the total costs in the UK, compared to 10% in Ireland. Reforming the red tape surrounding the house building process may be one of the only safeguards around steadier house price rises,’ he said. ‘Home ownership is still a key life milestone and aspiration for UK households, so any measures that bring this goal closer into view will be very welcome. The Right to Buy extension sounds good on paper –but we’ve yet to see how this will translate in practice, and the reality is that authorities will have to sell off existing stock first before they can fund and deliver this new promised land of affordable properties,’ he explained. ‘At the same time, tenant demand for housing will be accumulating, and this could spill over into the private rented sector, and artificially push up prices and competition for rental homes,’ he added. According to Charles Haresnape, chairman of the Intermediary Mortgage Lenders Association (IMLA), the government must work swiftly with the mortgage industry to ensure finance is available to help consumers with their purchases. ‘If not,… Continue reading
Greater London sees fall in home lending in first quarter of the year
There was a decline in in house purchase lending in Greater London in the first quarter of 2015 but increased remortgage activity, according to the latest regional data from the Council of Mortgage Lenders. First time buyers in Greater London borrowed £2.4 billion representing 10,100 loans, down by 16% in value and down 16% in number of loans compared to the last quarter of 2014. Compared to the first quarter of 2014, the total number of loans was down 14% and the amount borrowed decreased by 11%. Home movers saw a decrease in numbers to 7,200 loans advanced in the period, valued at £2.5 billion, which was down 18% by volume and down 15% by value on the previous quarter. Year on year comparisons show a decrease of 18% by volume and down 11% by value. Remortgage lending increased totalling 10,800 loans at £2.9 billion, which was up 10% by volume and up 13% by value. Compared to the first quarter of 2014, remortgage lending in London was up 2% by volume and 8% by value. According to Peter Rollings, chief executive officer of Marsh & Parsons, the lending market has calmed down from the heady heights of 2014 and the general election earlier this month also had an impact. ‘But cheaper mortgage rates are now making waves in the market, and with the wealth of products now available, we can expect this to ripple out into a stronger summer of lending,’ he said. He believes that the election result means political certainty and that along with a greater choice of homes on the market, and incentives like reduced stamp duty and Help to Buy support schemes at the lower rungs of the ladder will keep the market going. Continue reading
