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Portugal’s golden visa scheme reduces real estate investment for certain locations
The Portuguese government has reduced the minimum required amount for its golden visa for those investing real estate from €500,000 to €350,000 for certain locations. But the new lower amount only applies to property located in districts designated for urban renewal and is designed to reinvigorate interest in the popular visa scheme and provide a boost to Lisbon's regeneration programme. The scheme is also getting a boost after it was suspended earlier this year as a result of a legal void created by a piece of new legislation which did not address certain aspects of the existing golden visa laws. It is one of several so called golden visa schemes that allows property investors from outside of the European Union to get a visa to live in the country by investing in real estate. Others are available in Spain and Greece. ‘It was already the most popular scheme of its kind in Europe, but the government wants to cast the net wider. Spain and Greece launched similar visa systems in 2013 and have taken some of the market share, so the authorities are using properties in regeneration areas across cities like Lisbon to inject more interest in the scheme,’ said Nicholas Leach at Athena Advisors. According to the latest figures from the Serviço de Estrangeiros e Fronteiras (SEF) 2014 was a record year for Portugal with 1,526 successful golden visa applicants in total. However this year there has been less, with only 398 successful applicants in the first six months of 2015. ‘After the initial surge of investment into the scheme, there was bound to be a let up in demand. The demand of immigration incentives peaks and troughs, and this is why the government has shaken up the terms, to try and keep the rhythm going,’ explained Leach. Between its launch in October 2012 and the end of June 2015 the Portuguese Golden Visa scheme attracted €1.47 billion of investment, of which €1.33 billion or 90% was through the purchase of real estate, accounting for 2,289 golden visas. By comparison, the Spanish equivalent of the scheme generated around €700 million, granting 530 foreign buyers with a visa between its launch in September 2013 and March 2015. According to Leach some golden visa investors have looked to the Algarve and Silver Coast north of Lisbon, but Lisbon's city centre has been the main target due to the value and potential uplift. ‘Prime properties in Lisbon are a third of the price of their London and Paris equivalents, and if you look towards central regeneration areas like Mouraria there is even more value,’ added Leach. Following the recession of 2008, much of Lisbon's city centre fell into disrepair as both businesses and people left the city. Developers have targeted these areas over the last few years, renovating historic properties and even entire districts, upgrading real estate to international standards, thus enticing golden visa investors. Most of the city centre's sought after districts fall within the boundaries… Continue reading
Less prominent locations in Scotland seeing home sales grow
Secondary Scottish locations have come to the forefront of the property market in the year to June with saes in Glasgow, Dunbartonshire and Argyll and Bute increasing, the latest research shows. Sales in these areas were higher than in Scotland as a whole, with buyers now looking beyond primary locations in search of more affordable and attainable property, according to a new report from Savills. These secondary locations have benefitted from the UK government’s Help to Buy mortgage guarantee scheme and the Scottish government’s new build scheme, with its £250,000 price limit applicable to greater numbers of properties than in more expensive core areas, the report suggests. Both Glasgow City and West Dunbartonshire have enjoyed a significant increase in supply, with private sector house building completions up by 44% and 75% respectively, driving up transaction levels. In contrast, traditional primary locations such as East Renfrewshire, and Aberdeen City have suffered from a lack of supply and are subsequently lagging in terms of activity, although prices have remained stable. In Argyll and Bute, for example, Helensburgh has seen a resurgence of interest following the referendum, with interest in holiday destinations regaining momentum, according to Faisal Choudhry of Savills. However, across the board, sales above £500,000 have fallen slightly in Scotland due to short term uncertainty following the introduction of Land and Building Transaction Tax (LBTT) in April. ‘We’re confident sales will pick up as the market adjusts to the new system. Below this threshold, the property market is strong and there is still a great deal of activity up to £500,000,’ explained Choudhry. ‘The Help to Buy mortgage guarantee scheme has assisted more first time buyers in Scotland and across the UK to get on the housing ladder with 78% of users purchasing their first home,’ he added. Looking ahead, the scaling back of government initiatives and continued lending constraints could prevent significant growth in Scottish sales levels, according to Savills. ‘The discontinuation of the Help to Buy new build scheme combined with the stricter lending criteria introduced by the Mortgage Market Review (MMR) will limit the number of buyers who can access sufficient lending to purchase property,’ said Choudhry. ‘Anticipated rises in mortgage rates could also dampen activity among those with lower deposits. Consequently, transaction levels are not likely to show double digit growth in the year to June 2016, but we would expect to see a small rise, he added. Continue reading
UK housing repossessions continue downward to record low
Residential property repossessions in the UK, already at their lowest since records began, continued to fall in the second quarter of 2015, according to latest data to be published. In that period, the repossession rate was 0.02%, equivalent to just one in 5,000 mortgages and the data from the Council of Mortgage Lenders also shows that arrears continued to fall as well. Overall there were 2,500 properties taken into possession in the second quarter, down from 3,000 the previous quarter and 5,400 in the second quarter of last year. Of these, 1,800 were in the owner occupier market, and 700 in the buy to let market. However, the CML report points out that as in the first quarter, the current flow of repossessions probably continues to remain lower than the underlying trend would imply, even though arrears are also falling. In terms of arrears, the total number of mortgages with arrears equivalent to 2.5% or more of the mortgage balance was 106,400.This equated to 0.96% of all mortgages, again, the lowest rate since quarterly records began in 2008. CML director general Paul Smee pointed out that this is the first quarter in which the CML has been able to publish fully consistent data on arrears and possessions across both the owner occupier and the buy to let markets. As a result of improvements to the underlying data surveys, some back data has been restated. Of all loans with arrears of more than 2.5% of balance some 100,700 were owner occupier and 5,700 buy to let. In both the owner occupier and buy to let markets, the number and proportion of mortgages in arrears fell or remained static in all arrears bands and none experienced a worsening. Continue reading
