Tag Archives: opinion
Demand for Spanish property facing a number of issues in the coming months
Demand for property on the Spanish Costas has increased from expats who are benefitting from good mortgage rates and there is a rise in construction activity with a number of new developments being started, according to a new report. It also explains that there are a number of other factors likely to affect the real estate market in the coming months including currency rates, the Spanish election and in Andalucía new rules regarding holiday lets. Expat demand is coming from the UK, Scandinavia, and Germany with other northern Europeans also active in the market, says the report from the Survey Spain network of chartered surveyors covering the first quarter of 2016. However, there is likely to be an increased nervousness in the market as the British referendum approaches on 23 June because of fears that the poll will support the UK leaving the European Union. The threat of a Brexit and currency exchange rates are just a couple of major issues that could affect the Spanish property market. The report says that doubt about the referendum result and it’s after effects are causing UK buyers and sellers to hesitate. In addition, the fall in the value of sterling, from the €1.40’s to €1.20’s in the last three months has made the relative costs of property in Spain much more expensive for UK buyers but of course better for those wanting to move back to the UK. ‘However, the latter will be concerned that there is more reduction in value to come and so may decide to hold onto euro asset until closer to the referendum in the UK on 23 June,’ the report says. It refers to a recent letter received from a client which says they are concerned that if the UK leaves the EU then property prices in Spain may fall considerably. There are also risks associated with a change of Government in Spain. The firm has found that more than one client has stated that they will sell and move if a left wing Government should be elected. ‘Again, the uncertainty could be causing buyers and sellers to pause until there is a result, which could be before the end of May or, with a new election, at whenever a new Government is established after the end of June,’ the report points out. The property market could also be affected by decisions made by Spanish banks who still own a lot of properties due to the economic downturn. The Spanish banks are obliged to update their valuation of assets practice to include regular annual or bi-annual valuations of each individual asset. The report explains that this has seen Sareb, the Spanish bank rescue bank, announce a write down of their portfolio by more than €2 billion in addition to a €968 million write down in the past two years. ‘It may be that many private banks will have to do the same, which may result in them lowering… Continue reading
Asking prices down 1.3% in England and Wales, but seasonal dip lower than usual
Asking prices in England and Wales fell 1.3% month on month but are still up 6.2% year on year, taking the average to £292,572, according to the latest index data. It is the smallest drop in new seller asking prices during the seasonal November slowdown since 2011, according to the Rightmove report and the online portal says that it is indicative of even higher prices next year. Prices fell in all regions with Wales seeing the biggest monthly fall of 3.7%, taking the average asking price to £196,471 and both the South West and the North East saw a fall of 2.3% taking the averages to £279,643 and £142,917 respectively. Yorkshire and Humber saw a monthly fall of 2.2% to an average of £167,343, in the North West there was a fall of 1.9% to £171,709, while the South East and the West Midlands recorded a decline of 1.1% to £384,001 and £196,471 respectively. There was a 1.6% fall in asking prices in Greater London taking the average to £619,866, a fall of 0.6% in the East Midlands to £187,148 and a decline of 0.3% in the East of England to £315,568. The report points out that sellers who come to market in the run-up to Christmas typically set lower asking prices as buyers are harder to attract at this time of year. However, this November’s price dip of 1.3% or £3,977 is much less marked than usual, and is the smallest seen at this time of year since 2011. According to Rightmove director and housing market analyst Miles Shipside this indicates a positive underlying outlook for the year ahead among home owners, with research by Rightmove showing them to be in a confident mood and largely unfazed by the risk of higher interest rates in 2016. Given these findings, and the likelihood that demand will continue to outstrip supply, prices look set to increase again in many locations in 2016. Shipside expects it to be a short lived dip in asking prices. High home owner confidence is demonstrated by Rightmove research, with a sample size of over 23,000, which reveals that the majority, 85%, don’t think their financial situation will worsen in the next year. Despite the possibility of a 2016 rate rise that could increase mortgage repayments for many, 41% of home owners said they thought their household’s financial situation would get better over the next 12 months. Another 44% said things would stay the same, with only 15% forecasting they would get worse. Some 69% were also of the opinion that property would continue to rise in price over the next 12 months, with only 7% expecting prices to be lower. ‘Home owners have had a smooth ride over the past six or so years with a 0.5% base rate, so you would think that more might have concerns about the extra drain on their financial resources when the base rate inevitably goes up. Whether in 2016 or early… Continue reading
Home sellers likely to benefit from new UK property tax rules as well as buyers
House sellers in the UK could be set to save £213 million a year to the tune of almost £7,500 each, according to research by property website Zoopla. The reform of the stamp duty property tax which took effect today will remove ‘dead zones’ that existed before each previous Stamp Duty band and see a more progressive approach adopted where buyers will only liable to the portion of the property’s value above each new level. In an analysis of property sales in the 12 months to May 2014, the firm reckons that 28,635 properties have been under priced in order to make them more appealing to buyers by avoiding steep jumps in stamp duty. Zoopla found that the number of property sales in the price bands immediately before an existing stamp duty threshold is significantly higher than expected, while the number of sales in the price band immediately after a threshold, the stamp duty dead zone, is considerably lower. ‘The new, graduated Stamp Duty system is a long overdue overhaul to what the Chancellor admitted was a poorly designed tax and represents a fairer system for the vast majority of home buyers,’ said Lawrence Hall of Zoopla. ‘It also means that those selling their home at certain levels are more likely to achieve the real value of their homes and won’t be forced to discount their properties to sneak under certain bands,’ he explained. ‘Unfortunately those buying property worth more than £937,000 may feel unduly penalised by the new reforms, but the new structure represents a more balanced system overall and a welcome alternative to the mansion tax plans that had been proposed,’ he added. As an example, a house purchased at £300,000 would have resulted in a £9,000 stamp duty bill. With the new system, a buyer will save £4,000 calculated as follows: 0% tax up to £125,000, 2% tax on £125,000 to £250,000 which is £2,500, 5% tax on the remaining £50,000, which is £2,500, leading to a total stamp duty bill of £5,000. Kevin Hollinrake, managing director of Hunters estate agents with 125 branches nationwide, said the firm has already had deals secured as a result of this change. ‘In our opinion, this is great news. For too long, stamp duty has distorted the market deterring sellers from marketing their homes and buyers from buying them in the dead zones above the key thresholds such as £250,000 and £500,000. This should mean more property coming onto the market, and therefore, more sales which is good for the housing market and the economy as a whole,’ he explained. There will be substantial savings for around three quarters of a million home buyers across England and Wales according to research from Savills as all buyers up to £937,000 will benefit. By contrast, around 17,000 transactions above a value of £937,000 will bear an increased stamp duty tax burden, undermining the case for any further taxation of high value property. ‘The change is likely to make the… Continue reading
