Tag Archives: business
Research reveals a surge in residential investment in Lisbon
Lisbon has seen a surge in residential investment and development activity in the last two years, according to new research. The city is emerging from economic difficulties in a nation which underwent an European Union and International Monetary Fund bailout in 2011 and various initiatives are helping to revive its property markets, says the report from international real estate firm Savills. It points out that reform of Portugal’s residential tenancy laws, coupled with inward investor incentives, has spurred wide scale regeneration of the built environment, helping Lisbon to foster economic recovery faster than other parts of the country. Indeed, some €1.56 billion has been injected into Portugal’s residential markets since the golden visa programme was launched in 2012 and the bulk of this has gone into Lisbon. New apartments are being constructed and historic buildings are being redeveloped to meet modern day occupier demands. The report also points out that Portugal is now emerging from recession and the national economy grew by 1.5% in 2015, and is forecast to grow by a further 1.4% in 2016, just below the Eurozone average of 1.6%. Unemployment now stands at 12%, down from a high of almost 18% in January 2013. As part of its bailout package, Portugal was required to implement structural reforms to improve long term growth, productivity and competitiveness while reducing its deficit. Portuguese companies have increasingly focused efforts to grow their business abroad. This has fuelled exports, which are up 29.3% since 2010. New incentives for inward investment into Portugal’s residential markets were developed, helping to revive the residential sector and one effect of the financial crisis was to foster greater entrepreneurship, and Lisbon has emerged as a centre for tech companies and start-ups. The report explains that historically Portugal’s leasing market was protectionist, pro-tenant and gave little incentive for landlords to enter the market. As a result, Portugal’s home ownership rate is high, with an owner occupation rate of 75%. In 2012, the government introduced reforms to the leasing market, leading to greater flexibility in lease terms and, making the investment market more appealing to investors. This quickly attracted the attention of new developers and institutional investors. Improved market conditions have also fuelled big ticket commercial investment volumes. In total, $1.96 billion (€1.71bn) was invested into Lisbon’s commercial markets in 2015, of which $1bn (€0.87bn) came from the United States. Investors from the UK, Spain, Singapore, Switzerland and Germany, among others, have also been active in the last four years. Portugal launched one of the world’s most successful golden visa schemes in 2012. A minimum investment in real estate of €500,000 grants the non-EU buyer a visa and, in the longer term, a route to an EU passport. Foreigners need only be resident in Portugal for seven days in the first year of residency. By January 2015, the scheme had brought €1.56 billion of new investment into Portugal’s residential markets, the bulk into Lisbon. Some 2,697 golden visa residence permits have been… Continue reading
Mortgage lending in UK fell in April, but no surprise due to March buy let boost
Gross mortgage lending in the UK reached £18.5 billion in April, some 29% lower than March’s lending total of £26.2 billion, but 16% higher than the £16 billion lent in April last year. CML economist Mohammad Jamei pointed out that a fall was expected due to a rush in buy to let lending in March as landlords rushed through sales to beat the new 3% surcharge on additional homes that was introduced on 01 April. ‘As we move past the stamp duty change that came into effect at the start of April, we expect to see a quieter second quarter, as some transactions that were due to take place were brought forward to the first quarter of this year,’ he explained. ‘This is likely to mean that over the next few months buy to let takes a back seat as lending is driven by first time buyers, movers and remortgage customers. The underlying picture still shows signs of growth, as the market remains underpinned by strong fundamentals such as increasing wages and rising employment,’ he pointed out. ‘But it is possible that the uncertainty around the upcoming European Union referendum in June will weigh on activity in the upcoming months,’ he added. According to David Brown, chief executive officer of Marsh & Parsons, April lending was never going to live up to the March boost which was characterised by massively increased borrowing to landlords and second home owners. ‘But while we’ve seen a bit of a monthly comedown since then, the annual fundamentals are indicative of strength in the mortgage market. Widely expected to be an underwhelming month, April has still set an impressive benchmark for this time of the year, with lending levels harking back to the pre-recession era,’ he said. ‘Buy to let investors are just one type of buyer after all, and borrowing isn’t going to ground to a halt while they have a breather. The stamp duty changes didn’t affect the plans and intentions of hordes of other first time buyers and home movers, and in these areas buyer demand is still bursting at the seams,’ he added. David Whittaker, managing director of Mortgages for Business, pointed out that underneath the month on month lending patterns, there is a strong and steady current of buy to let lending critical to meet growing public demand for private rented accommodation. ‘Underlying annual growth in April shows a more sustainable path aside from any short term fluctuations and the need for buy to let mortgages to support the role of landlords,’ he added. The extremes of March make it futile to try to extract any meaningful insight from April's numbers, according to John Eastgate, sales and marketing director of OneSavings Bank. More importantly, market feedback suggests that normality has returned at enquiry level, although it will be the third quarter before we see this in new lending,’ he said. ‘A strong undercurrent of demand and a growing UK population means… Continue reading
March saw unprecedented lending levels in UK due to buy to let rush
Home owner house purchase lending was up by 60% year on year in the UK in March but the overall lending figures were affected by a rush from buy to let buyers seeking to beat a new stamp duty surcharge. Overall on an unadjusted basis, home owners borrowed £13.8 billion and first time buyers borrowed £4.5 billion, up 32% on February and 29% on March last year, according to the latest figures from the Council of Mortgage Lenders. Home movers borrowed £9.3 billion, up 75% on February and 82% compared to a year ago while remortgage activity totalled £4.7 billion, down 2% on February but up 7% compared to a year ago. Landlords borrowed £7.1 billion, up 87% month on month and 163% year on year but CML director general Paul Smee pointed out that activity was distorted in March due to a rush to beat the introduction of changes to stamp duty on second properties in April, alongside the seasonal uptick in activity before Easter. ‘While the increases are substantial, these supercharged levels of activity are likely to be temporary and will fall back over the summer months,’ he added. Peter Williams, executive director of the Intermediary Mortgage Lenders Association (IMLA), suggested that while activity has picked up among home movers, the leap in landlord lending makes it clear that price inflation has been fuelled by the Government’s stamp duty changes for buy to let properties and second homes, incentivising many buyers to bring their purchases forward where possible. ‘A policy move that aims to manage long term demand has therefore created short term tremors in the market and made it hard to predict how things will look when the dust settles. The Government’s hope is that first time buyers will find their prospects improved and lenders are certainly doing their bit with first time buyer lending up 29% year on year,’ he explained. ‘Continuing access to high loan to value (LTV) mortgages is an important part of this equation, and should not be frowned upon given the rigorous affordability checks in place,’ he pointed out. ‘Nevertheless, the UK needs a balanced housing market to prosper and playing politics across tenures cannot compensate for the underlying short supply of property. Added uncertainty from the upcoming EU referendum vote means the market is in urgent need of time and space to draw breath. Now is not the time to consider further tinkering under the bonnet after a rollercoaster start to the year,’ he added. According to David Whittaker, managing director of Mortgages for Business, it wasn’t just March which was exceptional. ‘The first quarter as a whole was strong as landlords reacted to tax changes. The dust will begin to settle in this part of the mortgage market through the second quarter of the year,’ he said. ‘Landlords have a new status quo and it’s not just the additional stamp duty that needs to be factored into… Continue reading
