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Sustained recovery in Spanish property market looking more likely
Improved confidence in the economy, a wide spread belief that property prices have finally hit rock bottom and more readily available financing are all helping encourage sales in Spain, according to experts. It has been widely reported that the summer months saw a recovery in the country’s property market with some seeing sales increase by 8.8% in June compared with the same month in 2013. Lending also increased, up by 19% in June 2014 compared with June 2013 and there was also a slight rise in prices which saw a 1% increase in the second quarter of 2104, the first quarterly rise for six years. According to a new analysis from the Spanish Brick Company the next two to three quarter will give an indication whether or not this is a sustainable recovery or a circumstantial rebound. ‘The main difference between 2007 and 2014 is that in 2007 the majority of buyers were speculative; they bought with a view to selling it on in a couple of years, with a gain of up to 20%. Now, investors are looking for long term investments, using the rental market to make a profit,’ said the firm’s Daniel Talavera ‘Any yield higher than 5% is considered a noteworthy investment and a 8% to 9 % yield is a real money maker. Regarding Capital Growth and Capital Gains, Spain delivers good results now but is suffering expensive taxation,’ he added. The research shows that before the economic crisis 40% of mortgages were taken out by immigrants. This has now fallen to only 3%. The average age of buyers has also gone up. The percentage of buyers younger than 25 has fallen from 16% to 3%. When it comes to investors, the volume of foreign investments is constantly increasing and 2013 saw a 16% increase on 2012. It is not uncommon for 80% of an estate agent's client base to be foreigners. It points out that the difference in house prices between 2007 and 2014 varies according to the region. Prices have dropped at a rate of between 30% and 70%, and, on average, it is estimated that houses are now 58% cheaper. It also highlights the importance of getting the price right. The economic situation created a negotiation culture. Before the housing market crash, the asking price was non-negotiable but according to the firm currently only 70% of offers get to completion and often these offers are only accepted because the seller is under pressure to sell due to mortgage obligations, unemployment and pressure from costs associated with the property. The typical seller has also changed. Financial entities have become the main Spanish real estate developers, followed by privately owned used homes and, lastly, new build developments. The biggest change to the type of home being bought has been an increase in the number of rooms compared with the buyer's initial expectations. Before the crisis, prices meant that the buyer had to lower their expectations when it came to the number of bedrooms. Now, a… Continue reading
Average prices in England and Wales down 0.2%, land registry data shows
Average house prices in England and Wales fell 0.2% in September compared with the previous month, according to the latest index from the Land Registry. But property has experienced year on year growth of 7.2% with the average price now £177,299 compared with the peak of £181,324 in November 2007. The data also shows that there were over 93,350 residential properties in England and Wales lodged for registration in September. The region in England and Wales which experienced the greatest increase in its average property value over the last 12 months is London with growth of 18.4% while the East experienced the greatest monthly rise at 1.4%. Yorkshire and the Humber saw the lowest annual price growth at 1.4% and the region also saw the most significant monthly price fall of 2.2%. The most up to date figures available show that during July 2014 the number of completed house sales in England and Wales increased by 7% to 79,214 compared with 73,749 in July 2013. The number of properties sold in England and Wales for over £1 million in July 2014 increased by 19% to 1,439 from 1,207 in July 2013. David Newnes, director of Your Move and Reeds Rains estate agents, said the figures show the market has experienced ongoing steady growth. ‘Property prices slowed down slightly compared with the previous month, but the annual picture is still stable,’ he pointed out. ‘There are regional differences with some regions doing better than others. Property prices in London have been steadily marching forward and have experienced the strongest recovery in the UK, whereas areas like the North East and Yorkshire and Humber still have some catching up to do,’ he explained. He also pointed out that there were 11% more first time buyer completions than a year ago. ‘These robust figures are in part due to the Help to Buy scheme which has crucially assisted first-time buyers get on to the property ladder. The scheme has made higher LTV lending much more accessible and first-time buyer deposits have fallen by 8%,’ said Newnes. ‘However, more geographical targeting of the Help to Buy scheme would help rejuvenate struggling areas in the UK, particularly those outside London and the South East. And with many regions still in a delicate balance of recovery, the government should be mindful of heeding any calls to curtail the scheme,’ he added. Despite the increase in property values in the capital, market conditions in London are now more sustainable, according to Nick Leeming, chairman of national estate agents Jackson-Stops & Staff. ‘London is seeing a greater balance in supply and demand, which is more sustainable in the longer term. With the London effect and buoyant local markets, the Home Counties remain relatively active and do not yet reflect any reduction in market activity. However many Jackson-Stops & Staff offices report that the top end outside London is seeing continued resistance to high pricing levels and, in many areas, sales at above £1 million remain hard to secure,’… Continue reading
UK landlords and rental agents unrealistic about wear and tear, it is suggested
Landlords and agents in the UK are still pushing for rental homes to be in a better condition when a tenant leaves and often have unrealistic expectations, new research has found. Whilst the tenant has a duty of care to return the property in the same condition at the end of the tenancy as found at the start and listed on the inventory report with allowance for wear and tear, the law does not allow landlords to claim ‘new for old’ from the tenant’s deposit. Yet the Association of Independent Inventory Clerks (AIIC) has found that many agents and landlords are seemingly unaware of the ‘betterment’ principle which means that if an item was old at check-in, and after a two year tenancy there is some additional damage, the law will not allow a landlord to simply replace this item with a new one. Instead, some sort of compensation is allowable towards future development. The betterment principle applies to cleaning issues as well. If a carpet was badly stained at the time of check-in, a landlord can’t expect the tenant to pay for cleaning at the check-out, no matter how long the tenancy has been. ‘We have seen many cases where the landlord or letting agent has not bothered to read the check-in inventory, so when it comes to the check-out, they are unrealistic over issues, which they believe should be included in the check-out and charged to the tenant,’ said Pat Barber, chair of the AIIC. She gave as an example a case where the landlord demanded that the tenants pay for repainting several rooms following a one year tenancy. The check-in inventory clearly stated that the walls were already well marked and the few additional scuffs and rubs were clearly a normal wear and tear issue due to the length of the tenancy. ‘The key underlying problem is that landlords, agents and tenants have different expectations when it comes to fair wear and tear issues. Obviously, there is a distinct difference between fair wear and tear and actual damage. For example carpet tread will flatten over time where there has been foot traffic, but cigarette burns, stains or soiling will require a charge,’ explained Barber. ‘Normal wear and tear is a fact of life with rental properties, just as it would be at home. The best way to landlords and agents can ensure that the property’s condition is fully recorded, is by having a comprehensive inventory in place at the start of any new tenancy, and that a thorough check-in and check-out report is completed,’ she pointed out. ‘Members of the AIIC are experts in assessing fair wear and tear and have the knowledge and experience to take into account all factors, and make a reasonable judgement as to whether something is fair wear and tear or not,’ she added. Continue reading
