Tag Archives: business
Falling asking prices in Spain could encourage British buyers despite Brexit
There are signs that British buyers are still keen on buying property in Spain but those selling are likely to be more successful if they lower their asking price. Agents are reporting continued interest in the Spanish property market from British buyers despite the decision to leave the European Union. This is coming from holiday home buyers and those considering moving to Spain to live. But the latest index suggests that sellers in Spain are having to be realistic about the price their property is likely to achieve outside a few popular areas. Data from the latest asking price index from Idealista shows they fell national by 3.1% in June year on year. Month on month asking prices fell 1.4% to their lowest level since the economic downturn despite rising briefly at the beginning of the year. But there are substantial regional differences. Whist the national average index continues to fall, some areas are already recovering. Idealista point out that prices in some big cities and areas on the coast have risen substantially since bottoming out, led by Barcelona with growth of 19.5%, Madrid up 6.4% and Valencia up 6.1%. There is effectively a two speed recovery in the Spanish market, according to Fernando Encinar, head of research at Idealista. He explained that prices continue to fall in inland locations but rise in popular coastal spots such as the Costa del Sol and cities such as Madrid and Barcelona. On a quarterly basis asking prices rose the most in the second quarter of the year in Malaga with an increase of 1.5%, up by 0.8% in the Costa Blanca and up 0.8% also in Tenerife and the Canary Islands. Real estate agents believe this could attract more foreign buyers. Lucas Fox International said it has seen a rise in enquiries from British based buyers since the vote to leave the European Union. Some disillusioned with the referendum result and considering a move to Spain, in particular to the key cities of Madrid, Barcelona and Valencia, where there are job opportunities and the local economy is rapidly recovering. A report last week claimed that the number of British citizens looking to move abroad had increased by 30% with Spain being the third most sought-after destination after Australia and Canada. Another study by the London School of Economics suggested that around 10% of 18 to 25 year olds who voted to stay in the EU are now considering a move abroad. An example is Sebastian King, a 22 year old living in the South of England working in financial services. He contacted Lucas Fox just a few days after the result. ‘I have been looking to move to Valencia for a year or so now but the Brexit result made me want to get a move on,’ he said. ‘For me Valencia has it all, the climate, it's exciting, full of history and culture as well as having a beach. Overall, I think Spain has lots of… Continue reading
Planning permission for new homes in England up 4% in first quarter
The number of planning permissions granted for new homes in the first quarter of 2016 in England remained high, according to the latest housing pipeline report. Permissions for 66,102 homes were granted in the first three months of the year, up 4% on the previous year, the data from the report from the House Builders Federation and Glenigan shows. This means that the moving annual total has now recovered to just short of the pre-crash peak in the 12 months to March 2008, and is ahead of the levels in 2006 and 2007, suggesting house building can continue increasing to meet the very high level of demand for new homes. Whilst many of these permissions still have some way to go before builders can start building them, the figures are a strong indicator of future supply. Permissions have risen steadily every year since 2009, with actual housing supply also increasing markedly over the past two years as more of the permissions have progressed to the point where builders can begin building. Indeed, the report shows that the last 12 months have seen a 66% increase in permissions granted on the nadir of the recession in 2009. Numbers are now only 0.3% below where they were at the highest point in early 2008. Demand for new homes remains extremely strong. The HBF estimates there is a shortfall of well over one million homes in England. Almost a third of young people, some 3.35 million, are living at home with their parents and 1.24 million people are on housing waiting lists. The Help to Buy equity loan scheme continues to drive demand for new homes and interest rates remain historically low at the same time over 180,000 new homes were added to the housing stock in 2014/2015, up 22% on the previous year, as house builders increased output in response to the rise in demand for new homes. ‘Planning permissions are a strong indicator of future levels of supply. The past two years have seen huge increases in building levels, with housing supply in England surpassing 180,000 homes per year in 2014/2015, up 22% on the previous year,’ said Peter Andrew, deputy chairman of the HBF. But he warned that the country still faces an acute housing shortage in this country. ‘Millions of young people remain at home with their parents and we estimate we are over a million homes short of what the country needs,’ he explained. Help to Buy equity loan is driving demand and helping thousands of first time buyers a week purchase a new build home and with interest rates remaining at historically low levels, demand remains strong,’ he pointed out. Allan Wilén, economics director and head of Business Market Intelligence at Glenigan, pointed out that the level of planning approvals remains strong, driven by an increase in the number of private housing units approved. ‘The firm development pipeline demonstrates that house builders are well placed to meet any strengthening in demand from… Continue reading
Landlords in UK urged to stay calm in face of EU exit vote
Residential landlords in the UK are being urged not to read too much into the decision by the country to leave the European Union, having gone through a turbulent period recently. Buy to let landlords are now paying a 3% surcharge in stamp duty on each additional property they buy to add to their portfolios and are also facing further tax changes. Now there are concerns that Brexit could affect their businesses. However, according to Richard Lambert, chief executive officer of the National Landlords Association (NLA), while leaving the EU is completely unknown territory, jumping to conclusions isn’t going to help anyone. ‘We welcome governor Mark Carney’s steadying words and his reassurance that the Bank of England and the Treasury have extensive contingency plans in place to ensure the country’s financial stability,’ said Lambert. ‘Any knee-jerk reaction will have a real impact on our members’ mortgages, tenants’ rents and overall confidence in the market. So we would urge the policy as regards to interest rates should be, to continue the Prime Minister’s analogy, one of steady as she goes,’ he added. In a joint statement, David Cox, managing director of Association of Residential Letting Agents (ARLA) and Mark Hayward, managing director of National Association of Estate Agents (NAEA), said that in the short term the market can weather the uncertainty. ‘The outcome of the EU referendum will create a period of uncertainty among home owners, buyers, investors, landlords and developers. We can expect international investors to look a lot harder at the UK as a market and this will have a consequential impact upon the house building sector as investment may be stalled,’ the statement said. ‘In the short term we believe that both prices, and rents, will remain stable, but we cannot be certain about the next quarter as political instability, and market unrest, could lead through into prices in the housing market,’ it pointed out. ‘We believe that the UK housing market is resilient, as is the supply chain that drives it. But as we indicated in our Brexit report last month, the bigger impact may well be in the skills necessary to drive UK housing development, and this is now a major concern for UK buyers and renters,’ it added. Anne Wilson, senior tax manager of the tax department at Pierce Chartered Accountants, pointed out that tougher buy to let mortgage lending criteria has been announced. The rules will require lenders to carry out stricter stress tests on prospective borrowers or those wishing to re-mortgage to ensure that they have sufficient capital to cover repayments if interest rates increase to 5.5%. In the future, there will also be changes to the way that tax relief for interest payments on the purchase of residential lettings will be given in the tax computation. This will affect individuals, partnerships and limited liability partnerships which let out residential properties. At present there are no proposals for this restriction to… Continue reading
