Investment
Spain is seeing a spectacular turnaround in its higher end property market
A renewed confidence amongst buyers, low prices and the Spanish banks’ willingness to offer competitive mortgages is attracting increasing numbers of new buyers in the country, according to a new analysis. In Spain’s major cities, international buyers are now beginning to compete against local buyers to secure the best properties in prime locations, according to the report from Lucas Fox covering the first six months of 2015. Indeed, Spain is seeing a ‘spectacular’ turnaround in its property market, according to the firm’s founding partner Alexander Vaughan. The report says that Barcelona is expected to be the most significant year of recovery for the prime residential property market in the past seven years. Prices have stabilised in the past 12 to 18 months, and international interest for turnkey properties is forcing up demand, alongside renewed confidence amongst local buyers. In Maresme, whereas in previous years local buyers accounted for as little as 20% of Lucas Fox’s sales enquiries, this figure is now closer to 50% and there has been a substantial increase in the number of sales transactions to local clients. The report also says that on the Costa Brava, sales in the first half of the year have been dominated by Northern European buyers with British, French, Swiss, Dutch and Scandinavian buyers being the most active. On Ibiza, while national averages of property prices continued to decline slightly throughout 2014 and are levelling off in 2015, average prices in Ibiza have seen increases since the start of 2013. In Marbella, sales have increased across the region, leading to a shortage of good quality properties in prime locations. Turnkey projects are selling so fast that Lucas Fox is seeing regular price increases of new off plan properties coming onto the market while in Valencia, the first quarter of 2015 has seen an increase of 14% for property re-sales. Madrid continues to attract more and more investment from both national and international investors. Lucas Fox data suggests that 60% of clients buy for investment purposes and 20% for the so called golden visa that allows non-European Union citizens to live in the country if they invest in real estate. Continue reading
Prime central London prices still falling
Prices in central London’s prime residential market fell 0.3% in October, the steepest monthly decline since the summer of 2010, and annual growth slowed to 1%, the lowest rate since October 2009. This latest data from real estate firm Knight Frank means that the firm has revised 2016 forecast for the sector down to 2% from 4.5%. According to Tom Bill, Knight Frank’s head of London research, even although it has been 11 months since the Chancellor raised stamp duty for properties worth more than £1.1 million, the consequences have only come into sharper focus in recent weeks. ‘The spring selling season was overshadowed by the general election and, after a seasonal lull in the summer, the autumn market has been the first reliable test of sentiment since the stamp duty increase. Autumn is typically a more active time of year but the final months of 2015 have been marked by a standoff between buyers and sellers,’ he explained. ‘There is a degree of nervousness around global economic events such as the China slowdown and the fact some markets have experienced strong price growth in recent years, but the stand-off primarily comes down to the arithmetic of higher stamp duty rates,’ he said. ‘Buyers calculate it will take them longer to recover the extra stamp duty expense in house price inflation and expect a lower asking price, something vendors are not always willing to concede,’ he added. The figures also shows that the number of exchanges in the three months to September was 17% lower than in 2014. Meanwhile, the number of new prospective buyers was 30% down on the same period in 2014. ‘However, despite the stand-off, there are signs some vendors have realised demand has cooled since the stamp duty increase and where asking prices have come down the market is operating in a normal manner and tapping into underlying demand that remains resilient,’ Bill concluded. Continue reading
Call for flood data to be included in UK home sales material
People looking to buy a home in the UK should be given more upfront information about the property’s flood risk, it is clamed, with a survey showing that the vast majority want it included on sales details. Some nine out of 10 people believe that flood risk information should be included on material about properties for sale, according to a study from the Association of British Insurers (ABI). At present no property search websites include flood risk information for the location of properties they list despite having data on anything from school catchment areas to most commonly read newspapers in the area, the ABI points out, adding that there is also a lack of flood risk information on brochures for new build properties. The association is calling for estate agents and property search websites to automatically provide traffic light style information indicating flood risk for the locations of the homes they list. This should be based on publicly available Environment Agency data. It says that all solicitors and conveyancers need to follow the Law Society’s guidance to conduct specific searches for flood risk, and to arrange for an in depth assessment by a technical expert if there is any flood risk to the property. These proposals are in line with a recommendation from the Pitt Review into the 2007 floods, that people buying a property should have access to upfront flood risk information. This information would not be a definitive guide to flood risk on an individual property but would be a very good indication of where further investigations could be necessary. The ABI is also publishing a new house hunters’ guide to advise people of the steps they should take in the meantime to stay informed about the flood risk of properties they are considering. ‘Flooding can ruin a home, destroying valuable possessions and often force you to move out while repairs are made. A higher risk of flooding also tends to mean higher insurance premiums,’ said ABI director general Huw Evans. ‘With one in six homes at risk of flooding, we need to make thinking about flood risk as much part of the home buying process as school catchment areas and transport links. At the moment, information on whether a property is at risk of flooding comes too late, often when people have already invested hundreds if not thousands of pounds in the conveyancing process,’ he pointed out. ‘That’s why we are calling for those who sell properties to include new traffic light warnings on flood risk in a property’s area. You can currently get more information about what paper your new neighbours might read than if a particular property might be at flood risk,’ he explained. ‘These simple warnings will help people go into the home buying process with their eyes open and knowing whether further investigations are necessary. We now want to work with estate agents, property websites and the Environment Agency to make this happen,’ he added. He also pointed… Continue reading
