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Residential property prices in Portugal set for moderate growth
Residential property prices in Portugal are expected to rise modestly over the first few months of 2015 after eight months of stability as housing market activity levels continue to rise. There is a strengthening in sales market confidence, with forward looking indicators showing rising optimism, according to the latest RICS/Ci Portuguese Housing Market Survey. In the lettings sector, sustained growth in occupier demand, coupled with a contraction in new landlord instructions, is helping to stabilise rents and rent expectations, it also shows. In the sales market, new buyer enquiries continued to rise, extending the run of uninterrupted demand growth stretching back almost a year and a half. Meanwhile agreed sales increased for the 12 month in a row in December. ‘Significantly, sales expectations are the most buoyant in four years and this sustained recovery in activity appears to have stabilised house prices, which have now remained more or less unchanged for the past eight months,’ the index report shows. ‘Crucially, prices are now expected to rise marginally. Although this is a positive development, we would warn against reading too much into this at the current juncture, given the still challenging economic backdrop,’ it adds. As a result of this improvement in sentiment, the national confidence index, a composite indicator of price and sales expectations, increased to +27, a new high for the series. In the lettings sector, occupier demand continues to rise at a steady pace and this is being accompanied by a significant fall in new landlord instructions. As a result, although still in decline, rents are falling at the slowest pace on record. Furthermore, rent expectations are pointing to a relatively stable trend over the next three months. According to CI spokesman, Ricardo Guimaraes, it is interesting to note that in some markets several real estate agents mention that there is a relative lack of housing available for sale. ‘At the same time, there has been a clear increase in demand. Naturally, this demand is oriented towards the most central locations and main cities,’ he explained. RICS senior economist, Josh Miller, believes that the bottom of the home price market has been reached and the lettings sector is not far behind. ‘Whether the market can transition from a broadly stable picture, to a genuine recovery very much depends on if the economic recovery can be sustained. On this front, things look promising but we are not out of the woods just yet,’ he said. Continue reading
UK buy to let sector surging ahead, it is claimed
The UK’s buy to let sector surged ahead of other areas of the housing market in January, according to the latest research from Connells Survey and Valuation. While most of the housing market began the year with a subdued outlook, buy to let bucked this trend and was the strongest performing sector with 37% growth in activity since the previous month, and on an annual basis the smallest dip of just 4%. It means that the sector has bounced back from a disappointing performance in December 2014 when it recorded one of the biggest monthly falls, according to John Bagshaw, corporate services director of Connells Survey & Valuation. He believes that as landlords are now ‘spoilt for choice’ with a record number of mortgage products to choose from, they are beginning to invest more. Low mortgage rates have also continued, posing even more attractive deals for potential landlords or those expanding portfolios. The first time buyer sector of the housing market was the only other sector which saw a monthly increase in valuations activity. On a month on month basis, activity for first time buyers increased by 3% though on an annual basis it saw one of the biggest falls of 28% compared to January 2014. ‘First time buyer activity increased on a monthly basis despite a stark contrast in performance with January 2014 when this sector had dominated the housing market. This was largely due to the flurry of activity as customers rushed to secure deals before the Funding for Lending Scheme (FLS) stopped mortgage funding at the end of January 2014. At the time the policy had boosted the housing market, particularly first time buyers by lowering mortgage rates,’ said Bagshaw. ‘Since then however, a series of policies have been introduced that have restricted lending criteria which have affected first time buyers more than other sectors and consequently had a major impact on demand. However, this month on month growth is encouraging and indicates that as the sector stabilises and adjusts to the new regulatory landscape, it should continue improving in the coming months,’ he explained. By contrast, activity for those already on the property ladder has been subdued. On a monthly basis activity dipped by 4%, though compared with January last year, valuations activity fell by a steeper 23%. Similarly, remortgaging saw one of the biggest falls in activity both on a monthly and annual basis. Since December, recent activity fell by 25%, while compared with January 2014 it decreased by 28%. ‘The current economic outlook indicates that low inflation and therefore the low Bank rate will continue for some time. As a result it appears that this is giving rise to optimism as more borrowers anticipate that lenders will be able to lower their mortgage rates even further. They are now waiting before securing a deal,’ said Bagshaw. ‘However, it is… Continue reading
Call for land reform in Scotland to be transparent and workable
Scottish Government proposals for land reform need to be coherent, clear and workable, according to the Law Society of Scotland. Submitting its response to the consultation on the future of land reform in Scotland, the society said that careful consideration should be given to ensure that pre-existing legislation it taken into account. While the Scottish Government has laid out proposals for a potential Land Reform Bill and the setting up of a Land Reform Commission, it is unclear at this stage what the remit or structure of such a Commission would be. ‘A new Scottish Land Reform Commission seems an appropriate way forward for progressing land reform in Scotland,’ said Paul Connolly, convener of the society’s property and land law committee. ‘We would suggest that if this proposal were to move forward, that there should be further engagement with stakeholders. Any such Commission must also ensure that it remains independent from executive influence and represents the interest of all stakeholders, such as agricultural tenants, crofters and charities,’ he added. The consultation also considers improving the transparency and accountability of land ownership in Scotland by limiting those who can own or take a long lease over land to legal entities registered in a European Union Member State. ‘We are concerned about this proposal. Restrictions such as these could be easily by-passed by non-EU companies setting up shell companies in the EU, for example a non-EU company could set up a UK registered company,’ said Connolly. ‘This would not necessarily fulfil the Scottish Government’s policy objectives of achieving greater transparency regarding the real land owner. It could also affect not only commercial land, but residential and agricultural land as well, thus having a potentially serious impact on business, and reducing investment,’ he explained. The consultation also proposes to impose further obligations on charities that own land, such as imposing a duty to consult with the local community before taking a decision on the management, use or transfer of land under their control. Stephen Phillips, convener of the society’s charity law committee, pointed out that there are already a number of regulatory obligations that are imposed on charities. ‘We see no reason why further obligations should be imposed on them,’ he added. ‘Under the proposals, a high street charity shop, for example, may be under an obligation to consult with the local community before it undertakes everyday repairs, such a roof repairs. This just seems wholly unnecessary and cumbersome in practice, and potentially expensive for charities without proportionate benefit to local communities,’ he concluded. Continue reading
