Tag Archives: industry
Court rulings in Spain create more uncertainty over illegal homes
Three rulings by Spain's Supreme Court have left the owners of more than 16,500 homes built in Marbella since 1986 in legal limbo by declaring planning regulations void. In a series of decisions, the country's highest court has declared null and void Marbella's urban planning regulations that were passed in 2010 and which legalised thousands of homes constructed since the previous town plans, dating back to 1986, were approved. In response to appeals against previous Supreme Court of Andalusia rulings, the rulings all arrived at the same conclusions, namely that the Town Council does not have power to retroactively declare legal properties that have been built illegally as that rests with the courts, nor to alter land classifications, nor legal liabilities. According to Adam Neal of real estate firm Terra Meridiana it means that individual property owners, even those who bought in good faith, will be held liable for illegal constructions, rather than passing the responsibility on to developers, as the 2010 plan sought to do. He explained that much of the problem arose during the three terms of the GIL (Grupo Independiente Liberal) government, from 1991 to 2003. The then mayor Jesús Gil is regarded as having run the council like a fiefdom, with claims of cash being funnelling under the table in exchange for carte blanche building licenses. ‘Subsequent administrations, under mayors Julián Muñoz, Marisol Yagüe, and Tomás Reñones, all sentenced to jail time for offences following the Caso Malaya scandal, were little better, leading to the suspension of the entire Town Council in 2006 by the central government, to make way for a team of auditors who tried to unravel Marbella's finances,’ he said. Neal believes that now all the paperwork for every property built within Marbella's municipal area since 1986 will need to be looked at very carefully indeed. ‘There are two possible outcomes: either a property is legal, because it was built on urban land as per the 1986 town plan, or it isn't, because it wasn't,’ he pointed out. According to Mark Stucklin of Spanish Property Insight it is bad news for the local property market, which was one of the few real estate bright spots in Spain until now. ‘It drags Marbella’s reputation back into the dirt by reminding people of its corrupt past, whilst the uncertainty will put off buyers and investors,’ he said. He pointed out that the decision could mean no more new building licences for the foreseeable future, plunging the residential construction business back into crisis just when it looked like recovering after more than a decade of downturn. Ricardo Arranz, president of the National Association of Urbanisation Developers, said the decision was right and expected. He explained that the industry welcomes the demise of the 2010 revised plan. ‘It was an unmanageable plan, absurd in every way and had started to scare off investors. It was done in a hurry by architects who knew absolutely nothing about the needs… Continue reading
More needs to be done to boost UK’s new Help to Buy ISAs
The UK’s new Help to Buy ISAs are a step in the right direction, but much more must be done to help people renting taking their first step on the property ladder, it is claimed. According to Kevin White, head of financial planning at independent financial advisory group deVere, it is effectively free cash from the government and anyone who wants to buy their first home should take advantage. The new ISAs are available from 01 December and will enable first time buyers can save up to £200 per month and the government will add 25% on top of the savings. Savers need to save at least £1,600 to get the minimum bonus of £400. The most savers will receive the bonus on is £12,000, meaning £3,000 for five years of saving. ‘The overwhelming majority of Britons dream of owning their own home and this is a hugely positive step in the right direction to help people get on the property ladder,’ said White. ‘However, even with the maximum HISA saving plus the government bonus, meaning a total of £15,000, most first time buyers will still find that they’re £15,000 short for the average deposit,’ he explained. ‘With this in mind, much more must be done to help Generation Rent achieve their financial goals. Too many people in their 20s and 30s are desperately keen to leave their rented accommodation and/or their parents’ home and to buy a place of their own but simply can’t afford to do so,’ he added. He believes that the government, the financial services industry and consumer groups must unite to reignite the savings culture so that saving once again becomes Britain’s social norm. ‘It is our experience that many people do indeed want to save but are not in a financial position to put money aside. We believe this could be helped to be turned around with a three-pronged approach,’ said White. ‘First, we would urge the government to create a comprehensive savings charter. Government needs to make saving worthwhile by, for instance, offering more proper incentives, such as the HISA, and reversing existing and planned tax raids on pensions,’ he pointed out. ‘Second, the financial services sector could do more to help people get more from their savings. For example, it could make it easier to switch bank accounts, and also develop new, accessible and simple-to-use financial products and solutions to give today’s young people more options. ‘And third, we need the government, the industry and consumer to work more cohesively to educate people on the real importance of saving. We need to highlight the value of long-term security over short-term gratification,’ he added. He also pointed out that savings give people a buffer when things go wrong, they act as protection, and they also give people more life opportunities. ‘On a wider scale, a society that… Continue reading
Landlord sentiment survey reveals impact of tax changes for buy to let
The UK Government’s reduction of landlord buy to let tax relief looks set to have an impact with landlords in the private rented sector looking to sell up, according to new research. The latest sentiment survey indicates that the tax changes, announced as part of the Summer Budget, are proving a major concern for buy to let investors. Currently, 9% of landlords think it’s a good time to sell up, with the tax reforms influencing their decision more than any other factor. Indeed, according to the survey from lettings agents Your Move and Reeds Rains, many fear letting out a property will become far less profitable when the reforms start to come into force in April 2017, and they are now considering leaving the sector as a result. This loss of enthusiasm is even dampening the optimism of the 31% of landlords who think that now is a good time to buy rental properties and 44% believe investing in buy to let property is more complicated than it was six months ago. The survey report says that this is due to more rigorous regulation, also introduced as part of the Budget, which includes requirements for landlords to check their tenants’ immigrations status before they let their properties. Some 19% of landlords are daunted by this task, and now feel unequipped to let out their houses without the support of letting agents to manage their investment. The survey also shows that 24% of landlords believe the legislation on letting out properties has become more confusing, with 11% feeling that they don’t fully understand the current regulations. These changes are denting landlord confidence, and general disenchantment with the letting industry was an important factor for 23% of landlords who think now is a good time to sell. ‘Landlords could be forgiven for feeling a little deflated at the moment and its worrying to see this may motivate many to reconsider their investment. The Government’s tax changes appear to be making investing in buy to let less attractive because of the seemingly smaller profits margins on offer in the future,’ said Adrian Gill, director of Your Move and Reeds Rains. He pointed out that if a tenth of landlords do decide to leave the industry, this would seriously shrink the number of properties available for tenants. ‘At a time when tenant demand is only rising, shorter supply will only translate into increased rents. This may mean landlords are underestimating the likely pace of future rent rises,’ he explained. ‘The government needs to cut the red tape involved in providing homes for renters if they hope to maintain a healthy supply of rental properties. With the Bank of England keeping a wary eye on the buy to let market, further regulatory interference may only make landlords’ and tenants’ lives harder. We need landlords to stay in the market and invest further in the sector,… Continue reading
