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Property prices creeping up on Spanish island of Mallorca
Property prices in the Spanish island of Mallorca are creeping up for the most sought after locations and sales are also rising, including at the lower end of the market. The latest real estate analysis of the island’s property markets shows that the recovery is well underway with prices up by an average of 10% for the best quality homes in the top destinations. Indeed, Engel & Völkers, which has 16 offices around the island, reports that sales increased by 27% in the first half of 2015 compared to the same period in 2014. The firm says that confidence in the market and a flux of foreign buyers, mainly German speaking, British and Scandinavian, have fuelled the initial price increases of 10% to 15% for top quality properties in high demand prime locations. Hot spots tend to be coastal locations such as Andratx in the south west of the island where, according to the latest Spanish land registry figures for 2014, Engel & Völkers dominated the market in Andratx and accounted for 70% of all transaction volume. In Palma the historic old town and the fashionable port areas of Portixol and Molinar apartments with outdoor space are at a premium and for these type of properties prices have increased by approximately 10% over this time last year. Son Vida is experiencing a boom with demand for contemporary style properties with sea views. The sale of plots has trebled since this time last year and in the South West, where over 40% of all sales are made to foreigners, prices have increased by approximately 10% over this time last year. The report says that buyers in the region are demanding top quality, sea views and Mediterranean design and new trends include concierge serviced apartments. It is predicting a further 10% increase in prices for top properties. Prices are stable in the West of the island with no significant increases recorded over last year while in the centre and South sales up by over 120% over this time last year. Prices are stable with increases of up to 10% for top locations. Hot spots in the North include Pollensa Town and the Port with increasing interest for the coastal areas of Mal Pas and Alcanada. Buyers want quality and frontline positions and prices predicated to increase by 10% in 2016. In the North East prices are stable here the lower end of the market selling well for properties under €500,000. The report says buyers are looking for bargains and specifically for fincas and townhouses which are less expensive here in comparison to other areas closer to Palma. In the South East the sales picture is similar to this time last year with prices remaining stable. The area continues to represent good value and investors are currently buying a range of properties from €300,000 to €3 million. Continue reading
Over half of UK landlords will increase rent due to tax cuts, poll shows
More than half of UK landlords who took part in a new poll said that they are likely to increase their tenants’ rents as a direct result to tax changed announced in the Mini Budget. Some 56% said they would need to respond with rent hiked to Chancellor George Osborne’s cutting of mortgage interest reliefs from 45% to 20%, in the poll by lettings agent Rentify. The poll also found that 57% are likely not to expand their property portfolio beyond its current size in the face of the cuts and 23% said they may plan to sell off their current properties. ‘These statistics are a stark reminder that if landlords aren’t incentivised to be landlords then they will just stop buying. The Chancellor’s cutting of the mortgage interest relief remains a very unwelcome decision and one that could irreparably damage the approach of many buy to let landlords and quality of living for their tenants,’ said George Spencer, chief executive officer of Rentify. Spencer said it is not good news coming on the back of recent research showing that more than half of 20 to 39 year olds will be renting property from private landlords rather than living in their own homes a decade from now. He explained that the current mortgage reliefs helped UK landlords offset other costs such as high street lettings agent fees, home insurance, maintenance and repairs costs, as well as council tax and any ground rent. ‘Mortgage interest relief often makes up a large proportion of deductible costs for landlords, and reduces their tax bills significantly,’ he added. Continue reading
Commercial property demand up in UK as supply falls
Demand from business for commercial property in the UK rose for the eleventh consecutive quarter, while available space fell for the ninth successive period, the latest sector market survey report shows. The Royal Institution of Chartered Surveyors (RICS) says that as a result, rents are expected to rise at the fastest pace since its survey began in 1998 with 46% more respondents forecasting higher, rather than lower, rent rates going forward. Offices remain the segment of the market where rental expectations remain most buoyant, while retail continues to lag although even in this area, momentum is picking up, while prices are expected to keep rising over the next 12 months. The picture is not dissimilar in the investment market, where purchase enquiries rose again; 53% more surveyors reported an increase in prospective investors over the quarter. Meanwhile, availability continues to decline, exerting further upward pressure on capital values. There were also reports of greater overseas buyer interest, with 36% more respondents seeing more enquiries from overseas investors. Across the whole of the UK, but excluding London, 95% of respondents believe that current commercial market valuations are either at or below fair value, this is roughly unchanged since the first quarter of 2015. However, in London 50% of contributors now feel that commercial property valuations are 'expensive', an increase from 45% in the first quarter. RICS says it was interesting that given the upcoming referendum on the UK’s position in the European Union, when asked if Britain leaving the EU would have significant negative implications for the commercial property market, 44% of respondents felt it would, while 32% believed it would not. Reflecting the high degree of uncertainty, 24% reported they did not know at this point. ‘The results of the latest survey suggest the price of commercial real estate will continue to move higher over the next 12 months and quite possibly by another 10%,’ said Simon Rubinsohn, RICS chief economist . ‘Fortunately, the strength of the occupier market is providing some underlying support for the market. Indeed, the feedback we are getting from around the country tells us that the economic expansion is continuing to broaden out with both tenant demand, and just as significantly, investor interest, rising in all areas,’ he added. Continue reading
