TSI
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 commercial property investment return falls slightly
Total return on investment in UK commercial property fell to 1.2% in July from 1.3% in June, according to the latest CBRE Monthly Index. July’s fall was mainly a result of weaker performance from central London, but despite this monthly fall, over the last 12 months rental value growth in central London offices has now reached a post-recessionary high of 9.65%. Overall rental and capital values continued to grow in July, but did so at a reduced rate, with rental values growing at 0.3%, slower than the 0.5% for June, and capital values growing at 0.7%, down from 0.9% the previous month. The office sector was one of the biggest movers in July. While the market recorded another month of good performance, after a strong second quarter, July’s returns fell from 1.8% in June to 1.3%. The report says that this was largely down to the central London market, where total return fell to 1.1% from 1.7% the month before. Total returns were also down in outer London/M25 and the rest of UK, but not to the same extent as in central London. Overall, however, the central London office market is booming. Annual rental growth for the 12 months to July 2015 is now at a post-recessionary high of 9.65%, overtaking the previous peak in the year to October 2011 of 7.13%. Central London offices now have the highest rental growth of all UK commercial property markets over the last 12 months, driven by 12.48% growth in the City, and 10.52% growth in Midtown. ‘Despite the slight dip in July, office rents and capital values in central London market have been growing strongly over the last year. As a result of this performance, investment into the market has grown from £2.4 million in in the first quarter of 2015 to £4 million in the second quarter,’ said Michael Haddock, senior director of CBRE. ‘The high level of competition for central London assets means that investors, both local and foreign, are increasingly looking at opportunities in the rest of the UK and activity has been growing at an even faster rate outside London,’ he added. High street shops and industrials also recorded positive rental growth, but with some marked geographical divergence across the UK. In both sectors, the South East outperformed the rest of the UK. Rental value growth for high street shops increased from 0.2% to 0.5% in the South East, while rental values for the rest of the UK were flat for the month. Similarly, the industrial sector recorded 0.7% rental value growth in South East up from 0.5% the month before, while the growth rate fell in the rest of the country from 0.4% to 0.2%. Continue reading
