Tag Archives: middle-east
Positive start to 2016 for Spanish prices with two indices showing growth all round
The residential property market in Spain has started 2016 positively with the latest figures showing that the average value of housing increased in January. The latest data from property appraisal company Tinsa, shows that the Balearic and Canary Islands have seen prices rise the most, up 5.4% month on month and 3.2% year on year. While overall prices increased by 2.9% compared to December 2015 and are up 1.1% year on year. Prices in large cities increased by 2.9% year on year while priced on the Mediterranean Coast rose by 1% and in Metropolitan areas they increased by 0.8%. But in smaller towns the market is not doing as well, with average prices falling by 2.2% year on year although there was a small rise month on month. It also shows that since the peak of the market in 2007, the average property prices is still down by 41% but there are regional variations. For example, since the peak prices are down 48% on the Mediterranean Coast, down 44.2% in large cities and down 43.5% in Metropolitan areas. The gap is less in the Balearic and Canary Islands, with an accumulated decline of 29.1% from peak while in smaller town they are down 37.3%. Property portal Fotocasa’s latest data is also positive. It shows that the average price of second hand housing in Spain increased by 0.3% month on month in January, taking the average price to €1,623 per square meter. However, year on year this index is still showing an average decline in prices of 0.3%. It also shows that since the peak in 2007 average prices are down 45% and 12 of Spain’s 17 regions have registered price declines in excess of 40% since the peak. In a Rioja prices are down 54.7% since 2007, in Castilla-La Mancha by 52.2%, in Navarra by 52.1%, in Aragón by 51.4%, in Murcia by 50.1%, in Valencia by 47.8%, in Catalonia by 46.6%, in Asturias by 45.6%, in Madrid by 44.7%, in Andalucía by 42.7%, in Extremadura by 41.6% and in Cantabria by 40.1%. In January average prices increased in 10 regions. The biggest rise was in the Canary Islands with growth of 2.1%, followed by Aragón up 1.2%, Valencia up 1%, Andalucía and Catalonia both up 0.9%, Castilla-La Mancha, Navarra and La Rioja all up 0.8%, the Balearic Islands up 0.2% and Asturias up 0.1%. In contrast, Extremadura recorded the biggest fall in prices with a decline of 1% in January, followed by the Basque Country down 0.9%, Galicia down 0.6%, Cantabria down 0.5%, Castilla y León and Murcia both down 0.4%, and Madrid down 0.2%. The Basque Country remains the most expensive of Spain’s regions, with an average price of €2,730 per square meter, followed by Madrid at €2,197 and Catalonia at €2,064. The regions with the most economical second hand housing prices are Castilla-La Mancha at €1,058 per square meter, Extremadura at €1,100 and Murcia at €1,145. The index also shows that 30 of the 50… Continue reading
Call for UK housing policy to be revised as number of first time buyers remain flat
The number of first time buyers in the UK has remained flat despite mortgages becoming more affordable than ever, new research has found. Record mortgage affordability is keeping the housing market afloat, but current housing policy needs to be revised to meet home ownership targets according to a new report by the Intermediary Mortgage Lenders Association (IMLA). Overall, it forecasts a continuing recovery in mortgage lending during 2016 and 2017, with a particular pickup in lending for house purchases by owner occupiers from an estimated £142 billion in 2015 to £155 billion in 2016 and £169 billion in 2017. However, reviewing 2015 activity, the report finds that even though mortgage affordability has hit its highest level ever, with buyers spending a record low 8.6% of their income on interest by the third quarter of 2015 and even first time buyers spending only 9.7% by November. It adds that first time buyer numbers have fallen marginally year on year, suggesting the government may need to revisit housing policy to successfully increase owner occupation levels. IMLA’s research shows that as a result of this increased affordability, first time buyer mortgage repayments are lower than average rents in every region of Britain, although this is not yet being translated into the desired increase in home ownership with factors including deposit affordability issues and tighter lending criteria also having an effect. The rise in affordability over the past year has been supported by cheap mortgage deals, alongside rising incomes. Mortgage rates are at record lows. February 2015 saw the average two year fixed rate at 75% LTV fall below 2% for the first time and by October the average two year fixed rate at 90% LTV slipped below 3% for the first time. In a trend particularly benefitting first time buyers, the last year has seen high LTV loans become substantially more affordable, with those borrowers opting for higher LTV options facing a smaller marginal cost for borrowing between 75% to 90% and between 75% to 95%. IMLA’s analysis finds the implied marginal cost of borrowing between 75% and 90% LTV, which was as high as 21.3% in the middle of 2010, had fallen to 12.9% by the end of 2014 and was only 7.8% by December 2015. However, improving affordability of higher LTV loans in 2015 did not spark a rise in aggregate high LTV lending or the number of first time buyers, which fell back slightly in the year to November 2015 compared to the same period of 2014. Deposit affordability issues and tighter lending criteria mean that not all buyers can access the deals available, even though high LTV loan repayments are now more affordable than ever, the report points out. The IMLA is concerned that the government’s decision to terminate the Help to Buy mortgage guarantee scheme at the end of the year could make it harder for first time buyers, as it may reverse the recent improvements in high LTV loan pricing. Continue reading
Tenants who want to buy a home are prepared to make sacrifices, new study finds
Over two thirds of tenants in the UK are saving for a deposit and are prepared to move away from family and friends so they can afford to buy a property, new research has found. The research study by online letting agent PropertyLetByUs, also shows that just under a third of tenants have given up hope of ever buying their own property. Some 46% of tenants can only afford to purchase a property if they move to a cheaper area and one in six tenants would consider taking in a lodger to help with the mortgage payments. Tenants were also asked how long they thought it would take to buy their own home and a third said within the next two years, almost 20% said within the next three years and 4% believe it will take them five years while 1.5% said that it would take them over 10 years. However, tenants do aspire to move up the rental ladder before they purchase their own home, with 51% saying that they are hoping to move into a nicer property when they can afford to. ‘Savvy tenants recognise that they may have to look further afield for properties they can afford. Many are prepared to move to areas that are some distance from their friends and families,’ said Jane Morris, the firm’s managing director. She pointed out that the latest data shows that a growing number of young people are renting for longer. According to PwC, almost 60% of 20 to 39 year-olds in England will rent their homes by 2025, while just 26% will have got on the housing ladder. This younger age group will find it increasingly difficult to buy and are likely to be older than previous generations, before they can afford their own home. ‘What is clear is that the majority of tenants still aspire to purchasing a property. But many tenants recognise that they will have to make sacrifices and compromise, so they can afford to buy a home of their own,’ said Morris. Continue reading
