Buying Spanish property safely

“After seeing many TV programmes in the UK showing the horror stories some unfortunate buyers have gone through while purchasing, I was surprised but pleased to learn there are steps people can take to safeguard their investment” says Roger Cox from Aldridge near Walsall, who recently completed the purchase of his new villa in Moraira on the Costa Blanca.

The new guarantee for buyers of Spanish homes seems the perfect solution to protect against any problems in the future. After all the Americans have used this system for years.

Roger (aged 43), lives in the UK with his family and has bought the two bedroom property as a holiday home. Continued Roger, “We were introduced to this part of Spain by friends who took us to the Costa Blanca about four years ago and we immediately fell in love with the area.

Relax and enjoy our home

“We were aware of the difficulties some buyers have faced when purchasing in Spain but at the time there seemed to be no way around the problem. However, we continued to love of Spain and finally found the perfect villa, negotiated the sale with the owner and by then Safe Purchase Spain had been launched. We completed the purchase of our property with a 20 year Safe Purchase Guarantee in place and can now relax and enjoy our home in the sun, knowing we have the rights as owners fully-protected.”

Safe Purchase Spain was devised and launched by Ian Hawkins at the end of 2009 and has already received a great deal of support from estate agents, solicitors and private vendors keen to provide financial protection against difficulties in home ownership in Spain.

“Spain is still the number one destination for Britons looking to buy abroad,” says Ian, “but continuing negative press coverage surrounding revoked building licences and demolition orders served on innocent owners has struck a dreadful blow to the Spanish marketplace. Now for the first time, the Safe Purchase Guarantee provides insurance protection against a wide range of problems that can occur after a buyer has completed his sale.

“These include such things as title defects, illegal building licences, access problems, border disputes, community problems, hidden lease agreements, fraud, identity theft, vendors’ debts amongst others. As far as I am aware, this is the first time buyers of Spanish property have had any measure of protection after they’ve purchased.”

Roger Cox (right) from Walsall, seen here with the founder of Safe Purchase Spain, Ian Hawkins

Safe Purchase Spain was recently launched on the Costa Blanca. In an effort to increase confidence, trust and visibility in a largely unregulated property market, all Safe Purchase Certified Partners sign the Safe Purchase Code of Ethics as well as statements confirming their professional experience and the fact they’ve never been convicted of fraud or financial irregularities.

Each agent includes the 20 year guarantee with every purchase and it is this approach that is set to revolutionise the way properties are bought and sold in Spain. This guarantee is underwritten by one of Spain’s largest insurance companies.

Continues Ian, “What many may not realise is that in the United States, title insurance is mandatory. Put simply, you cannot raise finance against a property without it. As such the title insurance industry is worth billions of dollars and is a way of life for most Americans.”

Concluded Roger, “To be able to own a property, with this type of peace of mind, has made our dream home, perfect. Life in Spain is relaxed, the weather is good, the infrastructure excellent and of course we are only two hours flight time from the UK making it ideal for friends and family to fly out. I genuinely feel that Safe Purchase Spain is the way forward for buyers in the future.”

For more information, go to Safe Purchase Spain at: www.safepurchasespain.com or call on: 00 34 96 647 32

Safe Purchase

Exclusively available through the network of Safe Purchase Certified Partners, the Safe Purchase Guarantee is available to buyers and existing owners of property in Spain, the Balearic and Canary Islands and provides insurance cover against fraud, identity theft, illegal building licenses, demolition orders, community disputes, unfair quotas, hidden defects, vendors and builders debts, administrative procedures, access problems, hidden leases, defective property sizes, border disputes, land registry inscription problems, illegal vendors and much more.

The Safe Purchase Guarantee includes a title insurance policy underwritten by Caser Seguros, one of Spain’s largest and most well-known residential insurance companies, established since 1942. It provides cover for 20 years from the first day of ownership and up to 360,000 Euros in compensation for monetary losses.

© Stewart Andersen and Stewart Andersen’s Property Blog, 2009. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Stewart Andersen and Stewart Andersen’s Property Blog with appropriate and specific direction to the original content.

Value of overseas property owned by Brits increases by over £2.6 billion in a year

Close Treasury estimates that the value of property in France, Spain, Italy, Portugal and America is £42 billion. Analysis¹ from the FX team at Close Brothers Limited Close Treasury (‘Close Treasury’) reveals that despite property prices falling in France, Spain, Portugal and the USA, and only a small rise in Italy, the collective Sterling value of property there owned by British citizens increased by over £2.6 billion between July 2008 and December 2009.  This is because the value of the Euro and the US Dollar against Sterling increased by 13.22% and 16% respectively.

Between 2008 and 2009, property prices in France declined by around 6.63%, but because of the rise in the value of the

The flower market at Revel in south-west France always attracts foreign residents

Euro, if those Brits owning property there had sold-up and converted the money back into Sterling, they would have actually made money.  Close Treasury estimates that there are around 98,000 properties in France owned by British citizens, and between 2008 and 2009, the combined Sterling value of these would have increased by just over £1 billion, or £10,373 per property.

In Spain, where Close Treasury estimates 144,500 properties are owned by British citizens, property prices fell by around 8.35% between 2008 and 2009, but again because of the rise in value of the Euro against Sterling, they would have made a collective gain of £1.1 billion, or £7,668 per property.

Even in America where property prices fell by 14.95% between 2008 and 2009, the rise in the value of the Dollar against Sterling meant that a British Citizen who owns a property there saw its Sterling value increase on average by £1,752.

The biggest winners were British citizens who own property in Italy, where a combination of rising property prices and a strong Euro meant that on average they saw the value of their properties there increase by £25,597 each.

Country	Estimated number of properties owned by British citizens	Percentage change in property prices between 2008 and 2009	Percentage change in local currency compared to Sterling between 2008 and 2009	Change in Sterling value of property	Change in Sterling value per property
France	97,750	-6.63%	13.22%	£1.01bn	£10,373.20
Spain	144,500	-8.35%	13.22%	£1.11bn	£7,668.14
Italy	8,500	3.05%	13.22%	£217.57m	£25,597.02
Portugal	12,750	-1.52%	13.22%	£234.72m	£18,409.70
USA	25,500	-14.95%	16.02%	£44.68m	£1,752.13

Close Treasury estimates that the value of overseas property in these five countries belonging to British citizens is £42 billion. Mark Taylor, Head of Foreign Exchange, Close Treasury said: “There has been a lot of volatility in the currency markets recently and many expect this to continue.  This is having a huge impact on the value of property owned by British people abroad and in many cases it is more influential than price changes in the local property markets.

“With the currency markets being so volatile, around 40% of our FX clients are taking out forward contracts as opposed to paying spot prices.”

For further information on Close Treasury’s FX business, call 020 7655 3449 or visit www.closetreasury.co.uk.

Analysis(1) of Close Treasury data.

Based on analysis of:

• Residential square metre prices published by the Global Property Guide as of Q2 2008 and Q2 2009. The Global Property Guide figures are calculated on a price per square metre for premier city centres and are based on web advertisements, looking at offers for sale, and offers for rent of resale apartments and houses.  Properties are in excellent condition, with good facilities, and have been refurbished or redecorated within the last five years. Changes are not adjusted for inflation.

• USD and EUR fluctuation in relation to GBP taken from FXHistory (www.oanda.com) as of 31 July 2008 and 3 December 2009

• Savills Second Homes Abroad, 2008

© Stewart Andersen and Stewart Andersen’s Property Blog, 2009. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Stewart Andersen and Stewart Andersen’s Property Blog with appropriate and specific direction to the original content.

France and UK New Double Tax Treaty Comes Into Force

We are delighted to publish the first in a series of authoritative articles from international experts in expatriate tax planning, wealth management and pension planning, Blevins Franks

The Double Tax Treaty between France and the UK has entered into force for French residents. It became effective on 18 December 2009 and contains some significant tax changes, including an exchange of information article, which will affect British expatriates living in France.

The treaty was signed on 19 June 2008 by UK Chancellor of the Exchequer Alistair Darling and French Finance Minister Christine Lagarde and then had to be approved by each parliament. The signing followed more than four years of debate after the publication of an earlier draft in January 2004. The new treaty replaces the original one signed in 1968.

The key points affecting expatriates are covered below.

Capital gains tax on UK real estate

In the right circumstances, if a non-UK resident sells a UK property usually no UK capital gains tax is due. This is provided that the property is not used in a UK trade and, in the case of property owned at departure, that the sale is made during a period when the individual is ultimately non-UK resident for a total of at least five complete and consecutive UK tax years.

The lovely town of L'Isle-Sur-La-Sorgue

A loophole in the previous treaty meant that such gains made by residents of France were not taxed in France either (and since capital gains are taxed at a fixed rate they were not even taken into account in France to calculate the effective tax rate on other income). As exempted ‘income’, most French practitioners treated the gains as exempt from French social fund charges too, so they could be wholly tax-free.

Under the new treaty, the UK position is unchanged, but the gain will be taxed in France – at a fixed rate currently of 27.1% (16% tax + 12.1% social charges). A ‘taper relief’ reduces the gain, though, by 10% for every complete year of ownership in excess of five years – down to nil after 15 years.

France will deduct the UK tax paid (if any) from the French tax, but no refund will be available if the UK tax liability is higher than the French one.

As the French exemption on the main home only applies if the property is your actual and habitual main residence on the day of sale, or when put on the market and sale occurs within 12 months, it is possible that the gain on a former UK home will now be taxable in France. There is no ‘time-apportionment’ for periods of occupation as there is in the UK.

Wealth tax five year holiday for UK nationals

The 2008 version of the treaty retains the wealth tax ‘holiday’ for UK nationals moving to France. For the first five full French tax years after becoming a resident of France, a British national’s wealth tax liability will only be based on French assets, all other assets being ignored. From the sixth year of residence onwards, wealth tax will then be payable on worldwide assets as normal.

If, having been French resident, an individual becomes non-resident for a period of at least three years, and then becomes a resident of France again, the five year exemption period will start again.

This new rule provides significant relief against French wealth tax for at least five years for those newly arrived in France. As the taxable date is 1 January each year, the year of arrival is nearly always on a non-resident basis anyway. So, if you are still planning on moving to France you could try to arrive near the beginning of a tax year to stretch out the exemption time period even further.

Although not yet confirmed, it is expected that anyone who arrived in France before the treaty came into effect should still qualify for any balance of the first five years of residence.

Airline Pilots

Under a loophole in the former treaty, pilots who worked for a UK airline but lived in France could largely escape tax on their earnings in both the UK and France. This is because the treaty gave primary taxing rights to the UK – with the income only taken into account in France to calculate the effective rate of tax payable in France on other income, but the UK only taxed the income for the days when flights started and ended in the UK.  Under the new treaty the loophole has been closed. French tax will be payable on the entire earnings, with a credit for any taxes paid in the UK.

UK Companies with French Property Gains

In the right circumstances a company that had no business premises in France could have possibly escaped French tax on gains as exempt business profits. However, this loophole is closed by the new treaty which treats all such profits as taxable whether they are seen as business profits or not.

Social charges

Market day in Pezenas

A significant change in general is that the new treaty now lists the social fund charges as ‘French tax’. They did not exist when the 1968 treaty was drawn up and their nature as a “substantially similar” income tax under the terms of the treaty has never been clear. Although the mechanism has yet to be confirmed, it is expected that straightforward credit can be given in the same way as with the other taxes, and so, for example, the social charges of 12.1% due on UK rental income should in future be able to be covered by UK income tax paid, whereas before the UK tax could have become stranded because of the way in which the income was taxed in France under the previous treaty.

Otherwise many things remain unchanged from the original treaty including the France-UK residency ‘tie breaker’ rules and the taxation of government pensions in the country of origin only.

There are tax-planning opportunities available which can reduce your tax liabilities. Seek advice on your specific circumstances from a professional adviser who specialises in the tax rules in both the UK and France who can suggest appropriate methods which can also mitigate tax for your heirs on your death.

Contact details: For additional information from Blevins Franks, go to http://www.blevinsfranks.com or call them on: 0044 (0)20 7336 1116 or email taxadvisoryservices@blevinsfranks.com

© Stewart Andersen and Stewart Andersen’s Property Blog, 2009. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Stewart Andersen and Stewart Andersen’s Property Blog with appropriate and specific direction to the original content.

The latest Chesterton Humberts CEBR Poll of Polls of UK house prices

November marked the sixth month of consecutive house price growth, with the average property price increasing by 0.5% from October 2009, according to the latest Poll of Polls, down slightly from the 0.7% rise of last month.

Six of the eight major house price indices showed monthly increases for the most recent month of data. The other two indices measure asking prices, suggesting falling prices earlier in the sales process, with agents becoming more realistic with valuations.

House prices in London also rose by 0.5% over the month to November, however the annual change in house prices turned positive, increasing to 1.8%. The average property price in the capital is now £5,513 higher than in November 2008, the largest increase in value over the year of any country or region in the UK.

Property prices

The trend of top value properties rising more rapidly in value than low value properties continues, with the price of the top 20% of properties by value increasing by 1.3% between October and November. Property prices of the bottom fifth rose by only 0.2% over the same period.

Property prices increased in the five most expensive local authorities, all in London, while prices decreased in the five least expensive local authorities. Camden, due to high value but low transaction numbers, has posted a 22.3% gain which should be smoothed over coming months.

Robert Bartlett, Chesterton Humberts CEO, comments: “It remains to be seen whether the house price increase momentum in London will continue following the announcement of the bank payroll tax in the Pre-Budget report. Lower bonuses could dampen demand for top-end housing in the capital.

Robert Bartlett, CEO, Chesterton Humberts. "The average house price in England and Wales is now £172,639, bringing the annual decline to just -0.4%. It now seems certain that the year-on-year change in house prices across England and Wales will turn positive next month."

“In October we highlighted that the agency-induced asking price increase was not sustainable as it had been created by inexperienced agents desperate for instructions giving unrealistic quotes to prospective sellers. It now looks as though the frenzy is abating and more realism appearing in valuations which should lead to a more stable market.

“The forthcoming election is likely to slow the market as both buyers and sellers move to the sidelines to await developments but overall, the outlook is generally more positive. We expect an increase in stock which will give rise to a steadier rate of increase in house prices as the wider economy improves.”

Pace of growth slowing

Douglas McWilliams, Chief Executive of CEBR, comments:

“While the pace of the most recent monthly house price increases has fallen back of late, the rate of change in house prices was always expected to ease after the bounce experienced over the summer and autumn months. Even though the pace of growth is slowing, average house prices have still increased by an impressive five per cent since the bottom of the market in April, surpassing virtually everyone’s expectations at the start of 2009.

“We still expect house prices to continue to grow in the New Year – albeit at a slower rate – as lending conditions continue to ease, base rates remain at historic lows and growth in demand continues to outpace supply. These supply shortages will persist into the medium term due to the minimal level of new housebuilding seen over the past eighteen months.

For more information, go online at http://www.chestertonhumberts.com

The Chesterton Humberts’ Poll of Polls brings together the leading house price indices to capture a unique look at properties for sale and that have been sold, in effect creating a medium value for house price polls. This report has been produced by Chesterton Humberts and the centre for economics and business research (CEBR).

© Stewart Andersen and Stewart Andersen’s Property Blog, 2009. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Stewart Andersen and Stewart Andersen’s Property Blog with appropriate and specific direction to the original content.

Property and some UK Pre-Budget Report (PBR) highlights

These are a few highlights of today’s statement made by Chancellor Alistair Darling:

• Borrowing has been estimated to be £176 billion in 2010 and £140 billion in 2011
• A new ‘broadband tax’ of 50p per month is being introduced. Anyone owning a landline phone will be paying the new charge to help fund the nationwide installation of ‘superfast’ broadband to 70% of the population.
• While pensions will go up by 2.5% next April, the previous item (superfast broadband) will help to wipe out this benefit given that most people of pensionable age have a landline phone
• National insurance contributions are going up. From April 2011, all rates of NI (employee, employer and self-employed) will go up by an extra 0.5%. That’s on top of the 0.5% from the PBR of last year
• VAT will go back to 17.5% from January 2010
• 2012 will see the capping of contributions by the government to public service pensions for teachers, NHS, local government and civil service. According to the Chancellor, this will save around £1billion a year
• Banker’s bonuses: There will be temporary levy of 50 per cent on any individual discretionary bonus paid above £25,000. Alistair Darling said the banks, rather than the bankers, would pay the levy. This temporary measure comes into effect immediately and will cover bonuses paid between now and April 2010.
• The Stamp Duty holiday will end on 1 January 2010

Given that the property industry helps to drive the economy, this brief round-up of four property professionals’ comments on the Pre-Budget Report might help to clarify the effect of the end of the Stamp Duty holiday:

Charles McDowell

Charles McDowell, the prime London property consultant, buying and selling properties over £5mn in Kensington, Chelsea, Belgravia and Knightsbridge, said:

“This lame duck budget is basically political posturing prior to election.  The current Government’s war on the City does nothing but diminish tax revenues and highlights the continuing value of property as an important asset class, particularly if inflation begins to rise. The old adage ‘safe as houses’ will be more relevant than ever in 2010.”

Immediately following Alistair Darling’s pre-Budget Report, Peter Bolton King, chief executive of the National Association of Estate Agents, said:

Peter Bolton King

“The Chancellor missed an open goal with his statement. By ignoring the advice of much of the property industry there is a real danger that the property slump that has hit thousands of families hard over the past 12 months will hit thousands more, harder, in the year ahead.
“Stamp duty unfairly distorts the property market. It is prohibitive to people looking for a step up the housing market and unfairly penalises people investing in buy-to-let portfolios.

“As a first step the Chancellor should keep the stamp duty threshold as it is when the current holiday ends in December. More importantly, the Government should commit to a complete reform of the tax to produce something that is fairer for everyone.”

John Phillips, Financial Services Director of Kinleigh Folkard & Hayward, stated:

John Phillips

“Whilst the return to a 17.5% VAT level from January 1st will push more money into Government coffers, it is not likely to help house buyers looking to access a mortgage.  People will have less money free to put towards saving for a deposit, and combined with a continued difficulty in obtaining lending, will not really help those looking to purchase property in 2010.

“The extension of the Mortgage Interest Relief Scheme by six months will be of little benefit to the housing industry.  Whilst it will provide much-needed security for those who own homes and who may be struggling financially, it is less likely to give an incentive to people in such circumstances who may have been considering selling their property. This will add to an already existent shortage of stock on the sales market.”

David Adams, Chesterton Humberts’ head of residential comments:
“The Government has produced a ‘steady as she goes’ pre-Budget report with eyes firmly on the horizon. This completely belies the reality that we are dead in the water and listing badly.

The large number of bankers who’ve been considering abandoning ship may now be persuaded that it is time to move off-shore and we could see a large number of country houses come to market out of season.

“The continuing record level of taxation on property transactions will go on depressing sales across the country. The London market will increasingly diverge from the rest of the country as foreign buyers continue to take advantage of the low pound to buy into prime central London property.

“What is bemusing is that we are selling properties of high tax payers and replacing them with foreign owners who aren’t paying any tax. Who will pick up the tab?”

David can be found on Twitter

© Stewart Andersen and Stewart Andersen’s Property Blog, 2009. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Stewart Andersen and Stewart Andersen’s Property Blog with appropriate and specific direction to the original content.

Helping to make Spanish property purchases safe

‘Safe Purchase Spain’ has launched in Spain as estate agents, the legal profession and private owners seek to ensure that their properties have the protection of a real insurance-backed guarantee that provides legal support and financial compensation for 20 years after buyers have purchased their new home.

Ian Hawkins firmly believes that house buyers want to protect their investment against unforeseen future difficulties and he came up with the concept after working for 10 years as an estate agent in Spain dealing with clients with very real concerns

“Home buyers can now confidently pick up the keys to their new Spanish property knowing they have 20 years protection by investing in a Safe Purchase Guarantee,” says Ian Hawkins, director at Safe Purchase Spain.

“Working within a largely unregulated industry I always acknowledged the excellent work of other property professional agents and lawyers committed to advising and helping their clients. This commitment is a vital ingredient in the Safe Purchase process.

“Spain has had a lot of bad press in recent years but the country still has a great deal of appeal to foreign buyers, not least the weather, friendly locals, infrastructure and easy and cheap accessibility from the UK and Northern Europe. I genuinely feel that people want to buy here but have held back for fear of losing a major investment. This way they can buy without worry.”

What exactly is Safe Purchase and what does it offer?

Exclusively through the network of Safe Purchase Certified Partners, the Safe Purchase Guarantee is available to buyers and existing owners of property in Spain, the Balearic and Canary Islands and provides insurance cover against fraud, identity theft, illegal building licenses, demolition orders, community disputes, unfair quotas, hidden defects, vendors and builders debts, administrative procedures, access problems, hidden leases, defective property sizes, border disputes, land registry inscription problems, illegal vendors and much more.

The Safe Purchase Guarantee includes a title insurance policy underwritten by Caser Seguros, one of Spain’s largest and best known residential insurance companies, established since 1942. It provides cover for 20 years from the first day of ownership and up to 360,000 Euros in compensation for monetary losses. Continued Ian, “Buyers can have a great deal of confidence by working with companies where they see the distinctive Safe Purchase logo.

Spain attracts homebuyers from all over Europe

“All our agents offer the Guarantee as an inclusive part of their services, so it’s essentially free to property buyers. Buyers will also be pleased to know that we visit every agent personally and collect relevant information about the company and its owners. We ask them to sign our Safe Purchase Code of Professional Practice and a statement to confirm that they have not been previously convicted of any type of fraud, money laundering or financial irregularities.

“This is a first for the industry. We have also worked closely with lawyers to create a unique ‘legal protocol’ for buyers which clearly shows what they can expect from a Spanish lawyer and gives them important reference points for discussion as they pertain to a given property.”

The Safe Purchase Guarantee provides:-

• 20 years protection based on the 130 year old US model of title insurance
• Free home contents insurance for 12 months
• Savings of at least 200 euros on legal fees
• Annual savings of up to 25% on home, health, life, car and funeral insurances
• Preferential advertising rates with www.holidaylettings.co.uk
• Guaranteed exchange rates and savings on bank charges with Moneycorp

Concluded Ian, “Safe Purchase is a process that conveys confidence, trust and provides real guarantees to buyers for the first time. Spain badly needs a credibility boost, particularly when so many agents are finding it hard to sell in the current market place, and we are confident that this is the way to do it.

“Our objective is to work with those estate agents committed to industry ‘best practice’ who understand the very real concerns of property buyers after years of negative publicity for the industry as a whole. Recognising that prevention is better than cure, our Certified Agents have now added a whole new dimension to the words ‘after-sales service’.

“The Safe Purchase initiative, therefore, represents a major leap forward for property professionals and those that really matter, their clients! At last there is a way to buy property in Spain with real guarantees.”

For more information on Safe Purchase Spain, go on-line at www.safepurchasespain.com or call: 00 34 96 647 3215

© Stewart Andersen and Stewart Andersen’s Property Blog, 2009. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Stewart Andersen and Stewart Andersen’s Property Blog with appropriate and specific direction to the original content.

Fifth month of house price growth fuels recovery, says Poll of Polls

October was the fifth month of consecutive house price growth, with the average property price increasing by 0.7% from September 2009, according to the latest Chesterton Humberts CEBR Poll of Polls.The average house price in England and Wales is now £171,218, a rise of £1,262 during September. The average house price is now £26,152 lower than its peak at the start of 2008.

House prices rose across all countries and regions of the United Kingdom. Prices in Scotland are now higher than they were a year ago. The annual decline in house prices continues to ease, with prices now -3.2% lower than a year ago compared to a revised contraction of 5.4% over the year to September.

All of the four main property types experienced similar increases in prices over the month. The prices of detached housing and flats bother rose by 0.7% in October, in line with the national average. The price of the top 20% of properties by value increased by 1.7% over the month, whereas, prices of the bottom fifth rose by only 0.5%, continuing the trend of faster growth in more expensive areas.

Robert Bartlett, Chesterton Humberts’ CEO, comments: “This month’s house price Poll of Polls supports our belief that the property market will experience a fractured recovery, with the London market and the top 20% of properties by value continuing to increase more rapidly than other areas and lower value properties.

Commented Robert Bartlett, CEO of Chesterton Humberts: "The outlook is generally more positive. We expect an increase in stock which will give rise to a steadier rate of increase in house prices as the wider economy improves.”

“In London, where the market dropped by between 30% and 50% if currency fluctuations are taken into account, recovery has already begun, with some areas already achieving peak 2007 prices in certain prime streets. This growth has been driven by the significant numbers of foreign purchasers who continue to benefit from the weak pound sterling and are keen to invest into what is traditionally seen as a safe haven for foreign money. The ongoing shortage of stock has also meant that the strong demand has assisted in the price recovery as competitive buyers bid up prices.

“In other parts of the country, recovery may take longer to accomplish although the continuing stock shortage is supporting prices in many regional markets. The risk of further declines outside of London is exacerbated by asking price inflation, caused by inexperienced agents desperate for instructions giving unrealistic quotes to prospective sellers.  Buyers will not pay over the odds for properties coming to market overpriced.

“The outlook is generally more positive.  We expect an increase in stock which will give rise to a steadier rate of increase in house prices as the wider economy improves.”

Douglas McWilliams, Chief Executive of CEBR, comments:

“Some commentators believe that house prices will dip again in 2010 and 2011 on the back of rising unemployment and weak economic growth. We believe that this view ignores other factors that are pushing prices in the opposite direction. Mortgage conditions have improved substantially since the worst of the crisis and lending continues to edge up.

“With base rates on hold, mortgages will remain relatively cheap albeit with post-credit crunch loan-to-value rates and higher risk premia. Furthermore, the supply side of the market will remain tight into the medium term – the current shortage of property on the market may be causing short term supply issues, but in the medium term the current shortage of new house building will also come into play.”

 

Visit http://www.chestertonhumberts.com for more information.

The Chesterton Humberts’ Poll of Polls brings together the leading house price indices to capture a unique look at properties for sale and that have been sold, in effect creating a medium value for house price polls. This report has been produced by Chesterton Humberts and the centre for economics and business research (CEBR).

With a network of 60 offices across the UK, including 27 in London, Chesterton Humberts is one of the UK’s leading property consultancies. The company also has a significant international presence with eight offices around the world, including St Tropez, Gibraltar, Mallorca, Lake Como, Singapore, Abu Dhabi, Sydney and Brisbane.
CEBR is an independent economics and business research consultancy established in 1993 providing forecasts and advice to City institutions, government departments, local authorities and numerous blue chip companies throughout Europe. The contributor to this report is economist Benjamin Williamson.

© Stewart Andersen and Stewart Andersen’s Property Blog, 2009. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Stewart Andersen and Stewart Andersen’s Property Blog with appropriate and specific direction to the original content.

Spanish property news

Spain’s Costa Cálida – price properties well and they will sell

The property buying public are after bargains and that’s exactly what they’re getting on the Costa Cálida. Price two bedroom terraced villas on an established golf community from as little as 50,000 euros (approximately £46,000) and they will sell.

Director of Mercers’ Mazarron office, Gerard Rees, explains, “The bottom line is that price drives sales and our discounted properties offset any exchange rate concerns. In euro terms, prices at our most popular resort, Camposol Golf, have fallen by about 30 per cent.  Meanwhile the vendor is content with repatriating increased funds back to the UK. While buyers may have dried up on other Costas, here on the Costa Cálida we have no shortage of lifestyle buyers who are unaffected by the recession and looking to take advantage of bargains.”

Gerard continues, “On Camposol Golf in particular we have resale properties priced about the same as new in 2002. Loan-to-value rates currently being offered by Spanish banks are also back to their old levels.  For UK buyers this means now around 50 per cent – 65 per cent and for Spanish nationals 65 per cent plus. Although not good, this is exactly how it was for us in the 1990’s right up until the early 2000’s with most of our buyers borrowing in the UK, having the cash or a combination of the two.  So really we are going back seven or eight years in terms of pricing and bank lending.

Once lending increases then house prices will return to where they were 18 months ago within a fairly quick time frame. In the meantime prices have certainly bottomed out.”

 

Rosa Villa is a real bargain on the Costa Calida

Rosa Villa, Camposol, Mazarron, Costa Cálida

 

With Camposol Golf’s average Rosa style villa selling for 155,000 euros, this 95,000 euro example is Mercers’ best bargain. Comprising two bedrooms and two bathrooms, the detached home is on a 400m² corner plot providing plenty of scope for a swimming pool.  The property is delivered fully furnished, is fitted with air-conditioning and has a spectacular rooftop solarium with views across the countryside and surrounding mountains.

Price just 95,000 euros (approx. 86,000 pounds)

Neptuno Villa, Camposol, Mazarron, Costa Cálida

Neptuno Villa is on the market for €160,000

Exceptional three bedroom three bathroom Neptuno style villa set on a 285m² plot within the popular Camposol Golf resort.  The detached home has all extras from hot and cold air-conditioning to a solar panel for hot water and satellite television.  The rooftop solarium has wide countryside views and furniture including white goods and a luxurious outdoor Jacuzzi is included in the asking price.

Price 160,000 euros (approximately £146,000) and open to offers

Contact Mercers on 00 34 968 199 188, UK Local Rate 0845 017 7805, email ccsales@spanishproperty.co.uk or visit www.spanishproperty.co.uk

Spanish property buyers could save thousands of pounds following UK agent’s link with leading foreign currency specialist

News of a link forged between the Cheltenham-based Spanish property firm The Almanzora Group and leading foreign currency and international payment specialist Axia FX of London means that the buyers of new properties in resort, village and beach locations in south-east Spain could save thousands of pounds.

The Almanzora Group – which acts exclusively as the principal agent in northern Europe for the for the development companies comprising the Almanzora Bay Group which is building in the Almeria region of Spain – says that its new partnership with Axia FX will give potential buyers a fast-track link to currency exchange rates which could save them significant sums on the cost of buying their properties.

They are at Desert Springs, Europe’s only international award-winning luxury family resort and championship desert golf course, the traditional fishing village Villaricos and nearby Playa Marques, known for its seven kilometre long Great Sandy Beach, El Playazo.

Simon Coaker, The Almanzora Group’s sales and marketing manager, says: “We are selling properties ranging from apartments, townhouses and cottages to villas, beach houses and country houses at prices from €178,000 to more than €1 million, but with the Euro and Pound Sterling virtually at parity, favourable exchange rates are essential when calculating the total purchase cost.

News of a link forged between The Almanzora Group and Axia FX means that the buyers of new properties like these in south-east Spain could save thousands of pounds.

“With Axia FX having access to Interbank rates, they can ensure the prices the client receives are much better than they would have received from their bank, providing him or her with considerable savings. In fact, for Almanzora’s clients, Axia FX will guarantee an improved rate compared with that received from any high street bank.

David White, managing director of Axia FX, said: “We will ensure that clients of The Almanzora Group always receive excellent service and we are able to fix quoted rates for up to one year in advance.”

For more information about the properties available, call The Almanzora Group on 01242 680299 or visit http://www.almanzora.com

For full details of the services offered by Axia FX, call Tim Sullivan, head of private clients: on 0207 093 7852 or visit http://www.axiafx.com

Axia Fx

Axia Fx was formed in April 2006 and commenced trading in June 2006 with the sole aim of making Foreign Exchange as simple and cost effective as possible. Having started life alongside a parent company, it has recently become a privately-owned company under the stewardship of David White.

The company’s head office is in the Canary Wharf area of London ensuring the company has first hand access to all market information gleaned through its global network of traders, economists, officials and market participants.

The Almanzora Group

The Almanzora Group, a subsidiary of the Robert Hitchins Group, acts exclusively for the development companies which comprise the Almanzora Bay Group. The Almanzora Group Ltd is the principal agent in northern Europe, including the UK and Ireland, marketing new properties developed by The Almanzora Bay Group in resort, village and beach locations.

http://www.travelsupermarket says the best ways to get to Spain are:

There are many non-stop flights into Southern Spain as follows:

• Malaga – the major gateway with multiple daily non-stop flights year round from up to 20 UK airports with Easyjet, Ryanair, Monarch, British Airways, Aer Lingus, bmibaby, jet2, Flyglobespan and flybe
• Granada – non-stop flights with Ryanair from Stansted, Liverpool and East Midlands – frequencies vary but operate year round
• Almeria – non-stop flights with Monarch from Birmingham and Manchester with Monarch, Easyjet from Gatwick, Ryanair from Stansted, bmibaby from East Midlands and jet2 from Leeds. Most services on this route are summer only
• PLUS Gibraltar – non-stop daily flights with Easyjet from Gatwick, British Airways from Heathrow and Monarch from Luton and Manchester

Flight times to Southern Spain are two and a half to three hours
Prices are from as little as £5 one ways when seat sales are on with carriers such as Ryanair. Average prices are around £80 to £150 return.

For more information, go to: http://www.travelsupermarket.com

© Stewart Andersen and Stewart Andersen’s Property Blog, 2009. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Stewart Andersen and Stewart Andersen’s Property Blog with appropriate and specific direction to the original content.

French property and mortgage watch — October 2009

French property prices rise by 0.1% during September

Prices now 2.8% higher than six months ago

Number of French mortgage enquiries through Athena Mortgages up 21% Q3 on Q2

French mortgage completions at Athena Mortgages up 14% Q3 on Q2

The French residential property market is continuing to show signs of stabilisation. While prices* fell by 1% during Q3 as a whole, they rose by 0.1% during September, resulting in a total positive return for the period April to September 2009 of 2.8%. Returns for the 12 months to September 2009 have now pulled back to a respectable -7.8%.

Unlike the UK, however, a history of prudent lending in France (lenders do not allow borrowers’ total outgoings on finance payments to exceed one third of their total gross monthly income) has meant

St Cezaire

mortgage finance is still readily available.

While mortgage finance in the UK remains extremely difficult to secure, especially at higher LTVs, the French banks continue to lend to borrowers with smaller deposits, even up to 100% LTV. This level of LTV is also available to non-resident borrowers, both for second homes and investment properties and is proving highly attractive given the ongoing weakness of sterling.

Mortgage completions

Interest in the French property market among UK-based investors is soaring as a result. In Q3 2009, Athena Mortgages saw a 21% rise in mortgage enquiries on Q2, which in turn was up 42% on Q1. Mortgage completions in the third quarter were also up 14% on Q2. Many British property investors are now looking across the Channel to add to their portfolios given the difficulty securing (competitive) finance at home.

The buy-to-let sector in France is attracting particular interest from investors at present, as depressed prices are boosting yields significantly in many areas. In the Normandy town of Alençon, for example, gross yields are 7.5%, while in the medieval town of Poitiers, western France, they are currently 7%. Nevers in central France boasts the highest gross yields, currently, of 7.6%. Other towns of note include Clermont Ferrand (6.8%) and Tours (6.4%).

For second home buyers, now is an ideal time to buy into some of the most desirable towns and cities of France at significantly discounted prices. For example, prices in the highly sought-after destinations of Biarritz, Cannes, Perpignan and Nice are all approximately 10% lower than a year ago.

Lending constraints

A growing number of UK investors are also placing French leaseback properties into SIPPs, something that can be arranged through several French lenders. To this end, Athena Mortgages is currently working closely with French tax specialists, Sykes Anderson, and Liberty SIPP.

John Luke Busby, director, Athena Mortgages (http://www.athenamortgages.com) comments: “There is a degree of correlation between the UK and France, at present, in the sense that both property markets are clearly stabilising. However, while the UK property market remains very difficult for investors to access given ongoing lending constraints, there is now a real appetite to lend among the French lenders, who have suffered much less than their British counterparts.

St Maximin Market

For a growing number of British property investors, France is fast proving the place to be, particularly given the availability of 100% mortgages, which circumvents the punitive exchange rate.

“Crucially, there is also significant innovation at the product level. For example, we have recently launched a ‘next generation’ hybrid mortgage product in conjunction with a major French bank. With a typical rate of 3%, the new product enables borrowers to split their mortgage amount into an interest-only portion and a repayment portion, which represents a perfect balance between the potential shortfall of a capital repayment loan and the speculation of the interest-only route.

“With extremely competitive borrowing rates, attractive prices and genuine product innovation, there’s a real buzz to the French property market at present.”
Source: *FNAIM

For second-home, leaseback, buy-to-let and equity release mortgage products, visit the Best Mortgages section http://www.athenamortgages.com/French_Mortgage/Best_French_Mortgages.php of the Athena Mortgages website.

About Athena Mortgages

Athena Mortgages is a specialist French mortgage broker offering French mortgages from a large panel of French lenders for non-French residents. An integrated team of multilingual professionals, with twenty years’ plus experience, helps non-residents and ex-pats find the right mortgage for properties in France. Athena Mortgages can source 100% finance for leasebacks, buy-to-lets and second homes, and also offers equity release and re-mortgaging options.
Working closely with many French property developers and agents who choose Athena Mortgages for the clarity and simplicity of presentation and service provided to their clients, Athena Mortgages takes pride in finding the best offer for clients until the date of signature for the property.

To speak to Athenba Mortgages, call + 44 207 474515

© Stewart Andersen and Stewart Andersen’s Property Blog, 2009. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Stewart Andersen and Stewart Andersen’s Property Blog with appropriate and specific direction to the original content.

Expats still feeling the pinch…but it doesn’t hurt quite as much!

Halifax International has launched the Expat Mood Monitor II, revealing the impact of the credit crunch and attitudes to working abroad

Results launched today from Halifax International’s second Expat Mood Monitor survey reveal that expats around the world are still feeling the impact of the global slowdown – but the situation seems to be stabilising overall.
In January 2009 over half (52%) of expats had noticed a decrease in their disposable income over the previous 12 months – six months on and this figure has increased to 59%. However, in other areas the picture has not altered too dramatically. Earlier this year 88% of expats had noticed an increase in how much they were paying for food; today that figure stands at 90%. The survey also revealed heartening news for investors – the number of expats experiencing a depreciation in the value of their investment portfolios increased by only 1% to 63%.
James Gairdner, marketing and product director at Halifax International, comments on the research,
“As countries around the world tentatively report a return to growth, it seems that the situation for the millions of UK expats living and working abroad is also stabilising.
“The onus should now be on providing the right range of savings products to help expatriates to position their investments in the right way.”

James Gairdner, marketing and product director at Halifax International

Fuel to the Fire

For the first time the Halifax International Expat Mood Monitor survey asked expats how much they are paying for fuel now compared to at the beginning of the year and identified that a huge 74% of respondents are paying more for petrol. Of those that have experienced an increase, a staggering one in seven is contending with an upswing of more than a 25%.

Working Knowledge

The Expat Mood Monitor II also surveyed expats regarding work and employment abroad. Despite having a reputation for working longer hours than the rest of Europe, Brits actually found that the hours demanded in a working week were the same abroad (34%) as they were in the UK. However a lucky one in six are working a full 15 hours less a week. Working abroad was also found to be a more relaxed affair than working in the UK; 52% said it is much more relaxed where they are now versus only 17% that felt the UK’s working culture was more laid-back.
With expats working less hours abroad and enjoying a more relaxed atmosphere when they are in the office, is there anything that expats miss about being employed in the UK? When asked that question 31% of expats said that ‘getting things done efficiently’ was what they missed most. Other factors expats missed about working in the UK included:

·         Office banter (15%)

·         Standard of technology (13%)

·         Only 5% missed the pay packages available in the UK job market

However the survey also asked what expats missed least about working in the UK. These included:

·         The commute (39%)

·         Red tape (25%)

·         Office politics (19%)

·         Five per cent said the thing they missed least about working in the UK was their old boss!

“Clearly there are small and large differences between the working life and culture of the UK, and what can be found through overseas employment. How well expats are able to deal with and adapt to these differences will affect how rewarding the overall experience will be,” comments Gairdner.
Four hundred expats living all over the world were surveyed on how the credit crunch has impacted on their lifestyles for Halifax International’s Expat Mood Monitor. This is the second Expat Mood Monitor which will be released every six months to provide a barometer of the financial and lifestyle issues facing expats today.

About Halifax International
Halifax International provides simple offshore savings to British expatriates through internet and telephone banking services. The savings accounts are available in sterling, euros or US dollars and are specifically designed to meet the needs of British expatriates who are resident abroad. For more information please visit http://www.halifax-international.com or call 01534 846555.

© Stewart Andersen and Stewart Andersen’s Property Blog, 2009. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Stewart Andersen and Stewart Andersen’s Property Blog with appropriate and specific direction to the original content.