Monthly Archives: March 2009

Opportunities abound for even the smallest of budgets via distressed sales of property.

March 31, 2009 – 11:07 am

Distressed sales equals bargains in Tenerife's property market

Distressed sales equals bargains in Tenerife

Whilst investment banks have been busy snapping up distressed Spanish assets for millions since the credit crunch first darkened our doors, there is also an opportunity for those on smaller budgets to benefit from distressed properties, especially in Spain and Tenerife where there is also a wealth of them…

Last year, investment banks, including the now defunct Lehman Brothers, were desperate to get their hands on distressed Spanish assets.

The credit crunch meant that big discounts were on offer for investors who would take on troubled assets or companies and the banks took full advantage, buying up million of pounds of distressed senior bank debt. Lehman Brothers also bought stakes in a defaulted senior bank debt agreement and other non-performing loan sales.

Why Spain?

Spain quickly became the central focus for banks, who viewed the Spanish market as full of opportunity. Whilst the Spanish economy was faltering after ten years of boomtime, with house prices stalling after years of meteoric rises; food and oil prices rose, meaning many Spanish and Canarian locals were in trouble, businesses were shutting down and homes were being repossessed. This meant that distressed assets were ten-a-penny.

Individual buyers eye repossessed properties

Spain and Tenerife has long been the number one European destination for British buyers and hundreds of thousands of Britons happily already own property here. But, due to the decade long property boom having come to an end, the property market is now saturated with apartments that won’t sell and developers that are desperate to offload them.

Some off-plan property investors have a desperate need to sell before completion as either their circumstances have dramatically changed or they exchanged/completed on properties they could not financially keep, with the sole intention of flipping.

Thus, they have a choice. They can either sell the property for far less than market value, which is a distressed sale, or they can have the property repossessed by the developer or bank and forgo their original deposit.

Either way, they are in trouble and with trouble comes opportunity. Many estate agents claim distressed homes currently represent the ‘best value’ in the country for those looking to buy a home abroad.

Distressed properties can come with discounts of up to 40 per cent and there are many available in sub-prime hotspots, where developers have been faced with a glut of unsellable apartments.

Duquesa on the Costa del Sol and Torrevieja on the Costa Blanca are two such areas. Spanish savings bank Caixa Catalunya has estimated up to 500,000 newly built properties remain unsold. In Tenerife, Adje has some great bargains at present and Arona generally has opportunities if you are prepared to look.

If you want more information, why not check out agents such as Tenerife Prime Property or visit the Tenerife Property Guide for up to date news on all the available properties, whether domestic or commercial, for sale or  rental investment. Many of the issues involved with buying “distressed property” and what to expect from such a sale will be explained, and relevant Spanish real estate terms and common sources of distressed property will be knowledgeably covered by a reputable agent or property portal such as these mentioned.

By Angela | Posted in Economy, General, Holiday, Miscellaneous Articles, Property, Tenerife, Weather | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Comments (0)

Money to invest? Plenty of bargains available to buy your dream home.

March 30, 2009 – 10:32 am

Now you really can afford that dream property in Tenerife!

Now you really can afford that dream property in Tenerife!

Property news has been somewhat discouraging over the past few months, but as the recession takes firm hold around the world, the value of property is dropping everywhere. A study released last week by the Global Property Guide, which monitors the international housing market, has found that property prices in 2008 fell everywhere.

If you’re worried about the state of the housing market in the UK, Spain and Tenerife, then take a look at the Latvian capital of Riga; the study found that prices fell by 37 per cent in 2008. Prices also fell drastically in Lithuania, with the average home in Vilnius dropping by 27 per cent.
Compared with the UK, where the drop last year was between 15 per cent and 18 per cent, the British plight doesn’t seem nearly as bad. A Spokesperson for the guide said, “It was a dismal year, but most worrying is that the downturn is still accelerating in the UK.”
Another survey by Knight Frank and the Royal Institution of Chartered Surveyors (RICS) published last week revealed a similarly gloomy picture.
But those with the money to invest should not feel disheartened by the figures, as there are bargains to be had. Right now, with house prices falling   in some countries, there is an opportunity for people to buy in their dream location of Tenerife.
By Angela | Posted in Economy, General, Property, Tenerife | Tagged , , , , , , , , | Comments (0)

How about turning your hand to property renovation?

March 27, 2009 – 12:37 pm

Renovation in Tenerife can result in your dream home

More and more people in Tenerife are now looking for a renovation project which has plenty of scope for personalisation and transformation.

There is currently a decline in the number of people buying houses on large developments in Tenerife and Spain generally but it seems that people’s passion for taking on a property renovation project has in fact increased.

As well as being able to control the development of the property, another benefit is the financial aspect, as ruins and older property are much more affordable and you can also plan the work in stages as and when funds become available.

This suits those who cannot raise the funds to purchase in any other way, those who like the thought of buying cheaply in a weak market and adding real value, and those who no longer feel good about spending money they don’t have in the form of a mortgage.

If it is your dream to find the perfect renovation property in Spain then here are some tips to consider:

Think about why you are buying the property and let this guide you. If you’re buying a property to live in, the practical aspects of everyday life will be more important to you than whether the home has room for a pool, which is essential if you are buying a holiday home or rental property. You also need to think about the accessibility of the property, its proximity to essential amenities and services such as electricity and water supplies. Ultimately, you need to do research to make sure you have planning permission granted to enable the renovation to take place.

Get a reputable estate agent or lawyer on board to help you find the right kind of vendor. They will also check whether the property is being sold free of any debts or claims against it. The land title needs to be carefully investigated to ensure you’re buying what you think you are, that land boundaries are identified and that there’s no chance anyone can impound the property or lay claims to it in the future, or prevent you from developing it.

Look realistically at your finances before you proceed. You will need to be able to afford to buy the property in the first place and pay for the renovation work. Get quotes from builders that include professional fees, final finish and any money you’ll have to pay for planning permission, building regulations etc, then have a  contingency budget ready, just in case.

Be realistic about how long the entire project will take - and remember it could take months to get the permissions you need to start and secure the services of a builder you  want to do the work.  Anything from the weather to public holidays can and will affect build time, so don’t set unrealistic time goals.

Once you’ve transformed your Spanish old property or even ruin into the palace you’ve always dreamed of, what are you going to do with it? If you want to let it out you’ll need to market it. If you want to live there permanently, have you sold your UK property? If you want to resell it for profit, can you afford to potentially ride out any period of economic downturn such as the world is currently experiencing?

By Angela | Posted in Economy, General, Holiday, Inspirational, Miscellaneous Articles, Property, Tenerife, Things to Do | Tagged , , , , , , , , , , , , , | Comments (0)

Internet to replace mortgage brokers?

March 25, 2009 – 4:30 pm

In response, Evaluate Technologies has said advisers need to work with the internet and not against it if they are to continue to hold an active role in sourcing mortgages for their clients.

The internet may be used to find a mortgage for your property purchase in Tenerife

The internet may be used to find a mortgage for your property purchase in Tenerife

The Internet could replace the need for mortgage brokers as the preferred distribution channel in the future, according to new research…

Recent research conducted on behalf of financial outsourcer Opal suggested that the internet and electronic channels were likely to surpass mortgage brokers as the preferred distribution channel.

However, Evaluate claims that only those brokers with a distinct lack of vision will be hampered by future technological evolution.

With services such as online shopping, researching and comparing become ever more popular, Evaluate has urged advisers to embrace these changes in consumer habits by marketing themselves at those consumers who expect to play a more active role in the mortgage and financial services sourcing process.

According to data from Forrester Research, around 28 million UK consumers already shop online and that figure is set to jump to 37 million by 2014 - the equivalent of £56 billion in value.

The research added that UK consumers are leading the online shopping trend, with spending reaching around £1,312 per person per year.

Julie Speed, National Accounts Director at Evaluate Technologies, said, “Firms operating in the mortgage market have to look at what is happening around them and realise how powerful a tool the internet really is and work with it not against it.

“There will always be a need for advice as house buying remains the biggest commitment there is but there is growing evidence that people are looking to take a more active role in the sourcing and comparison process.”

Speed added: “The amount of time being spent online is growing at a huge rate and for the mortgage market to be so behind the rest of the financial service industry in the utilisation of this technology is nothing short of staggering.

“There is still time to make changes to firms outlooks and models but these must be done soon to really maximise the huge potential that the internet can add to brokers offerings.”

By Angela | Posted in Economy, General, Miscellaneous Articles, Property, Tenerife | Tagged , , , , , , , , | Comments (0)

Buyers can take advantage with cash in hand when buying property

March 23, 2009 – 4:57 pm

Cash is currently king when buying property

Cash is currently king when buying property

Despite tight credit lines, buyers have the upper hand in today’s falling market, but only some can take advantage…

Buyers with cash in hand are in the best position to take advantage of the current climate. Vendors are more likely to accept a lower offer on their property from a cash buyer than a higher one that’s subject to obtaining a mortgage. Cash buyers are king.

This is especially true if your cash is in a foreign currency. With no currency to leverage, sterling cash buyers can’t match these savings, but they can get good deals. They may be able to get a better property than they could have previously imagined. Add to this the fact that interest rates have hit an all-time low of 0.5 per cent, making it less attractive to keep money in a savings account, and it’s easy to see why cash purchasers are returning to the market.

In the past couple of weeks, we’ve seen a lot of cash buyers, because they’re not getting enough interest from their savings accounts. Some of them are buying to let because rents, although much weaker than in the past, are still appealing compared to the yield on savings accounts and the uncertainties of the stockmarket. Others are purchasers in their fifties who want to help their children get a foot on the property ladder and know they can now obtain excellent value for money.

Opportunities for investors

Beyond stimulating the cash market, the Bank of England’s sixth consecutive cut in interest rates has also opened up opportunities for mortgage buyers, provided they can persuade banks to lend to them. Cheaper mortgages mean property is once again appealing to investors because the yields are starting to stack up now that interest rates are so low. Buyers need to acquire a property with good rental prospects, because the letting market is very crowded. They must commit to it for the medium to long term, as they’re unlikely to see any capital gains if they resell in the immediate future.

The joint effect of low interest rates and substantial drops in property values can also benefit upsizers. The money they can save on their upward purchase will more than outweigh the money they lose on selling their smaller property.

Top tips to make the most of the market

Cash buyers should be wary of buying with too much emotion, as this may lead to paying more than a property’s market value.Euro and dollar buyers must consider the possible effect of further currency fluctuations, and, if buying to let, assess how much a sterling rent will be worth when they convert it back into their own currency

Sterling investors should be wary of the rental market becoming too saturated

Establish a good relationship with estate agents, as stock is being sold off-market. It’s important to have a rapport with the agents and not just be a name in their database.

By Angela | Posted in Economy, General, Miscellaneous Articles, Property, Tenerife | Tagged , , , , , , , , , , , | Comments (0)

Selling a property in Tenerife

March 22, 2009 – 2:31 pm

Pet smells can be a turn off for buyers or renters of your property

Pet smells can be a turn off for buyers or renters of your property

Selling your property in Tenerife (or anywhere else for that matter) will depend on what you want to sell, where it is and how much you want for your property. There are many estate agents in Tenerife that will gladly add your property to their portfolio. Now that you have decided that you wish to sell, invite a number of local estate agents around such as  Tenerife Prime Property and ask them to value your property in todays market. What you need to know is what is the value of the property in todays current market - we all want as much as we can get but its only the realistically priced properties that sell in today’s property market in Tenerife, indeed throughout the world.

Having valued your property using various agents you should now have an idea of what the true value of your property is. How quickly you want to sell your property depends on your own personal circumstances, do you need to sell? Do you need to return to your home country, are you desperate? All questions that you need to answer before deciding on the right price that you should ask for your property.

Instructing the agents - you now know how much you want and how soon you want to sell. No one knows more about your property than yourself so give the agent all the information and the details you can about the property and ensure that the pictures they take of your property are suitably presented both in the shop and on the internet. Its a fact that over 85% of people looking to buy a property abroad now use the internet as their primary source of investigation - so make sure when they see your property its presented correctly. Tenerife’s estate agents will allow you to instruct more than one agent so don´t sign an exclusivity form unless you only want to use one agent.

Viewings - property viewings are necessary if you want to sell your house. Make sure the agent has done their job by ensuring the client is aware of the fact that your property is perhaps on the top floor and there is no lift or its above a bar - so it wouldn’t appeal to older or disabled clients. We have listed some of the well known facts about property presentation when trying to sell your house below.

Tidy Up - clean the house, wash the windows, wash up, move laundry, present your house like a show home.

Pets - we might love pets but we shouldn’t expect others to so move them to the outside when taking viewings or better still ask someone to take them for an hour or so. Move their things and make sure the property doesn’t smell of pets.

Children - we all love our kids, but if you have unruly children then again ask someone to take them for an hour or so so they don’t interrupt you while you are talking to potential buyers.

Aroma - Make sure your house smells right, before the viewers arrive open all your windows and let the fresh air meander through your house. If necessary place some fragrant air fresheners around the property. Freshly baked cakes and bread and the smell of coffee are proven relaxants and give the property a homely smell.

Doors - Keep all doors closed during the inspection and allow the viewer to open the door and enter the room before you so they see the whole room at first glance without you blocking the entrance or the initial view.

Bathrooms & Kitchens - women are in charge of these areas traditionally and these two rooms alone can sell a house. Ensure that your kitchen and bathroom are clean and tidy and very well presented if you want to appeal to the lady viewer.

Garage - if you have one try to show the fact that you can actually get a car in it. Don’t let viewers see your garage full of clutter.

Outside/Gardens - if you have gardens or terraces once again present them nicely, clean away any unruly weeds and spend a little on touching up some of the paintwork, present the garden as nicely as possible avoid clutter in the garden.

If you have felt that when you have viewed a property, the owners haven’t taken time or care over presenting their house for sale you will know what we mean.

Selling - , you’ve had a couple of viewings and perhaps someone has made an offer - great news - now its down to your agent to make the preparations and get a deposit. Fingers crossed all will go ahead without any glitch and you can move on to where you want to. What if there have been no offers? What if the property has been on the market for months without even so much as a driveby? Well if your property hasn’t attracted anyone to view you may need to review a number of issues including 1. Your Price and 2. Your
Agent.

Is the price right, is your agent marketing the property in the right way, are you appealing to young buyers, older families, singles? Whats the competition like in your immediate area? These are many of the considerations you need to watch on a weekly basis to keep ahead of what is happening on the property market in your area and to react to it quickly. A good agent would keep you abreast on this and other information affecting the sale of your property and he should also feedback to you on what clients are saying about your property good or bad. When all else fails sometimes its better to rethink the whole process of moving - perhaps it just isn’t the right time to be selling in your area in which case you would be better off waiting until the market has turned or alternatively you could end up selling your property for far less than it is worth especially in a buyers market.

Whatever you choose in your quest for a sale we wish you every success and hope that you have enjoyed reading our article on selling your property.

By Angela | Posted in Economy, General, Inspirational, Miscellaneous Articles, Property, Tenerife | Tagged , , , , , , , , , , , , , | Comments (0)

Luggage failed to arrive? Fear not! Help may be at hand!

March 20, 2009 – 1:22 pm

Lost Luggage? - help is at hand!

Lost Luggage? - help is at hand!

Arriving at your destination only to find that your bags have not accompanied you on your trip is one of the most irritating aspects of air travel. Now, the European Union has formed a new body which will order airlines to pay compensation to travellers when their luggage fails to arrive…

I remember a holiday that I had been looking forward to for months being tainted when I spent the entire fortnight wearing bad T-shirts hastily purchased in a tourist shop.

Yes, I was one of the victims of the ‘I’m here, but my luggage isn’t’ travel curse and spent the whole trip in possession of a set of golf clubs (not mine, I hasten to add) and no lovingly packed suitcase.

I never saw that suitcase again…

Now, the European Union (EU) is planning to set up a new body to take the sting out of holidaying sans luggage. The new regulations would mean that passengers would no longer have to sue airlines who refuse to pay out for their missing stuff.

This new body has been in the pipeline since 2007, when it was revealed that 42 million bags failed to arrive at the same time as their owners.

The EU immediately launched an investigation into the problem to see why it was growing year on year. Britain’s Air Transport Users’ Council has indicated that the number of mishandled bags could be as high as a whopping 70 million by 2019.

The EU’s Transport Commissioner, Antonio Tajani, says ‘strong political intervention’ would be necessary if these numbers are true.

The EU hopes that these latest proposals will give passengers more rights when their baggage is lost or badly delayed. EU rules already allow compensation to be claimed by passengers who are denied boarding and those who have suffered cancellations or long delays to their flights.

The Air Transport Users’ Council, the consumer watchdog, has long complained that passengers are being short changed by airlines when they sought compensation for lost or missing luggage - some travellers being offered a pathetic per cent of the true value of their lost bags.

Luggage-tracking devices have been introduced by some companies including i-Trak, ImHonest.com and Trace Me, to try and crack down on the lost luggage phenomenon.

Customers order labels online and attach them to their bags. If the bag gets lost, the tags are printed with instructions for finders to call a toll-free number or file an alert online. The service then contacts the owner, who then pays to have the bag shipped home. ImHonest.com is the only one that rewards the finder - they get two packs of tracking stickers to use on their own luggage. So getting off your flight and awaiting your luggage arrival in Tenerife in the future may not be quite so traumatic!

By Angela | Posted in General, Holiday, Miscellaneous Articles, Tenerife | Tagged , , , , , , | Comments (0)

Exchange rates favour some ex- pats

March 20, 2009 – 10:41 am

Exchange rates may favour ex pats

Exchange rates may favour ex pats

With increasing numbers of ex-pats taking advantage of the weak pound to move money or themselves back to the UK, obtaining the best exchange rate on exchanging to sterling from a foreign currency is something more and more people are asking about…

Firstly, foreign banks are something of an unknown quantity. Sometimes they offer good exchange rates but load in a hidden commission, or excessive charges for the money transfer to the UK.

In most cases, sellers of overseas property will be best off bringing their Euros or Dollars back to the UK and carrying out the exchange here.

Not only will this eliminate any communication problems, but it returns control of the transaction to the individual, rather than being at the behest of an overseas bank.

Shopping around between different banks and currency companies should then yield the best rate on the actual transaction.

Register with a couple of experienced brokers and see what rates are on offer. A reputable company will also be able to tell you what is happening on the markets to help you make an educated decision on the best moment to sell.

While the Pound is so weak, it is also worth considering fixing your exchange rate in advance. For example, if you are selling a property in the Eurozone, once you have exchanged contracts you can secure an exchange rate for your completion.

As generally the Pound is expected to get stronger over the coming months, this could mean your Euros are sold at fantastic rates before you even have them in your bank account.

Again, make sure all the options are explained to you - it could literally make a difference of thousands of pounds on your property sale.

Robin Haynes, Managing Director at Currency Index, said, “We are seeing more and more enquiries where clients are selling their overseas property and repatriating funds to the UK.

“This can be a tricky area for people to negotiate, so it’s vital they contact an experienced currency broker to make sure they don’t lose out due to high charges or poor exchange rates,” added Mr Haynes.

By Angela | Posted in Economy, General, Miscellaneous Articles, Property, Tenerife | Tagged , , , , , , , , , , , | Comments (0)

Spanish Banks to create estate agency?

March 18, 2009 – 9:52 am

From Spanish bank to estate agency?

Around half of Spain’s savings banks are joining together to create an ‘estate agent’ to sell defaulted property and developments worth £2.7 billion…

A new company, Ahorro Corporación Soluciones Inmobiliarias (ASCI), will be managed by Ahorro Corporación, a financial services firm jointly owned by the savings banks.

It aims to become the biggest estate agents in Spain using 17,000 local bank branches offering property for sale and to rent.

It is hoped that it will help to offload a huge number of properties that are now owned by the banks and discounts of up to 25 per cent are expected.

So far 23 of Spain’s 42 savings banks have joined. Caja Madrid and La Caixa, Spain’s two largest savings banks, are not yet part of the scheme but they are looking at the situation closely.

The new company will sell all types of property including land, developments under construction, commercial real estate, industrial property, hotels, and homes. The company claims that it already has stock for sale valued at £2.7 billion.

Residential properties will be offered for sale at discounts of up to 25 per cent, and the banks also have the option of offering finance to buyers. Most of the residential stock so far is reported to be made up primary residences, but holiday homes on the coast will also be on offer.

The move will also allow the banks to wipe impaired property assets off their balance sheets. However, if discounts are to be offered the process could also involve write downs, which could reduce their capital.

Some newspaper reports in Spain claimed it was the creation of a ‘bad bank’ dealing in toxic assets but this was denied by Antonio Fernández, Head of Ahorro Corporación

By Angela | Posted in Economy, General, Holiday, Miscellaneous Articles, Property, Tenerife | Tagged , , , , , , , , , , , , , | Comments (0)

Long and Short Term Rental investors gain in Tenerife

March 15, 2009 – 11:55 am

Rental Invetsors gain in Tenerife

Rental Investors gain in Tenerife

A change in holiday habits and trends has helped make Tenerife rentals a great investment choice.  Tenerife, in the Canary Islands is the most popular winter getaway destination from the UK, beating the likes of Barbados, Egypt, Dubai and Goa. Rental investors have noticed that the growing popularity of the private holiday rental has had a major, positive effect on the profitability of property investments on Tenerife and the Canary Islands.

The demand for package holidays has receeded and is being  replaced by the growth of the independent traveller.  Technology, the internet in particular, has been a major influence on our ability to be different.

The real winners in this attempt to be seen as different, are the owners of investment property.   The majority of owners are very optimistic about their projected earnings over the coming year, expecting an increase on the previous one.

This change in holiday habits is already having an effect on the property market in Tenerife.  As demand rises for privately rented holiday accommodation, so supply follows closely on its heels.  Increasing numbers of buyers are now listing rental income as an important factor in their purchase.  The BBC recently showed a documentary on the subject and papers are running articles on Tenerife rentals.

Of course, not every property is suitable for such an investment.  Tenerife investors need to take care in selecting the right property for the best returns, and the minimum problems.  There are many factors to be taken into account, from the type of holidaymaker or long term rental you might expect in the area you are considering, to the rules of the specific community of owners.  With experience of the market, a well established and reputable estate agent will be able to advise and assist you.  Needless to say, choosing which agent you use is of paramount importance to the success of your investment, so look for one which is long established with a good track record (recommendations are always a positive sign).  Correct business advice should lead to  lucrative business in Tenerife.

By Angela | Posted in Economy, General, Holiday, Miscellaneous Articles, Property, Tenerife | Tagged , , , , , , , , , , , , , | Comments (0)