interest – Tenerife Property

May 10, 2011 – 8:27 am

Low interest rates in Spain and Tenerife look set to rise

Euribor (12 months), the interest rate generally used to calculate mortgage repayments in Spain, rose to 2.086 in April, a change of +8.4pc compared to the previous month, and the first time Euribor has been above 2pc since February 2009.

On an annualised basis, Euribor is 70.3pc higher than it was a year ago (see graph above), meaning higher monthly repayments for borrowers with mortgages resetting now.

Repayments for a typical mortgage (150,000 Euros, 25 years, Euribor +0.25) will go up by around 64 Euros /month, or 775 Euros / year. That will punish many a stretched household budget in Spain.

Rates wil probably go upwards now. We are in a period of exceptionally low interest rates which cannot last forever.

By Angela | Posted in Economy, General, Health, Inspirational, Property, Tenerife | Tagged Eurior, interest, mortgage, Spain, Tenerife| Comments (0)

Spanish mortgage rates rise again

March 7, 2011 – 9:41 am

Spanish mortgages rise again.

Euribor (12 months), the interest rate generally used to calculate mortgage repayments in Spain, rose to 1.714pc in February, from 1.55pc in January, a monthly change of +10.6pc. On an annualised basis, Euribor is 39.9pc higher than it was a year ago, meaning higher monthly repayments for borrowers with mortgages resetting now.

Repayments for a typical mortgage (150,000 Euros, 25 years, Euribor +0.25) will go up by around 35 Euros /month, or 400 Euros / year. That will punish many stretched household budgets in Spain.

The final figures for 2010 show new mortgage lending fell by an annualised 7.4pc in 2010 (volume), the 4th year in a row of declining lending. On the positive side the decline has slowed down compared to the fall of 22pc in 2009 and 32pc in 2008.

Overall lending was down 7.8pc in value terms, with the average residential loan value last year at 116,860 Euros, down 0.8pc compared to 2009. The average new mortgage interest rate was 3.87pc, down from 4.59pc in 2009.

There are many bargains around in Tenerife and the Canary Islands due to the state of the world’s economy. A reliable estate agent will be able to lead you to good value property and also the best deals on the mortgage front.

By Angela | Posted in Economy, General, Holiday, Inspirational, Property, Tenerife, Things to Do | Tagged Canary Islands, estate agent, Euribor, Euros, interest, mortgage, Property, Spain, Tenerife| Comments (0)

Sterling slide against the euro and dollar is halted

February 17, 2011 – 12:18 pm

The sterling exchange rate against the euro affects those making property purchases inTenerife at present.

Sterling struggled for most of the week ahead of the Bank of England’s interest rate decision on Thursday. Recent speculation regarding potential interest rate hikes by the UK central bank saw traders buying into the pound but with low growth levels and inflation expectations indicating an increase in price pressures over the coming months the likelihood of a rate hike has diminished and concerns that premature monetary tightening could risk destabilising the UK recovery.

Economic data from the United Kingdom gave little support to the Pound which was batted around by risk aversion and movements in EUR/USD exchanges. The British Retail Consortium released its retail sales index which indicated sales had bounced back in January after a decline due to poor weather in December.

However, it is thought a rush to beat the VAT increase had contributed to the late push in higher retail spending. RICS house price data showed the pace of price declines eased for a third consecutive month. The data underlined the difficulty faced by the Bank of England in its decision over whether to raise interest rates, similarly a mixed performance in industrial and manufacturing output added to the argument that caution was required to support growth as well as tackling inflation.

The Bank of England rate decision saw the Pound react positively to the announcement and halted the currency’s slide versus the dollar and the euro. The UK central bank kept interest rate on hold at 0.50% and made no changes to its £200bln asset purchase program, as expected.

Expectations are still that the BoE may be forced to raise rates to combat inflation. A view supported by the release of higher than expected PPI inflation figures although late week geo-political tensions rising in Egypt prevented any gains as risk aversion dominated trade.

Clearly the sliding pound against the euro makes a difference for those who are trying to buy property in Tenerife at present but also for those who are selling and wish to change the euros back into pounds. The use of a good money exchange company such as Moneycorp will ensure that you get the best exchange rate for whichever currency that you have. The rates from these companies tend to be better than the high street banks. It really does pay to shop around.

By Angela | Posted in Economy, General, Health, Holiday, Inspirational, Miscellaneous Articles, Property, Tenerife, Things to Do, Weather | Tagged Bank of England, BoE, dollar, Egypt, EUR/USD, Euro, inflation, interest, Moneycorp, pound, rates, sterling, UK, VAT| Comments (0)

Euribor rate falls

January 7, 2011 – 10:04 am

Spain's Euribor rate falls

Euribor (12 months), the interest rate mainly used to calculate mortgage repayments in Spain, fell to 1.507pc in December, from 1.541pc in November (-2.2pc). On an annualised basis, Euribor changed by 21pc compared to the end of last year. That means higher monthly repayments for borrowers with mortgages resetting now.

As a result of the latest increase, repayments for a typical mortgage (150,000 Euros, 25 years, Euribor +0.5) will go up by 20 Euros /month, or 240 Euros / year.

The big news of the month was October’s collapse in new mortgage lending, which fell by an annualised 24pc (to 39,542), and by 25pc compared to September, according to figures from the INE

This is the sixth month in a row that new mortgage lending has fallen, a clear sign of trouble for the market. New mortgage lending has been falling since July, and the latest fall comes on top of a slump of 16pc in September.

The average residential loan value in October was 111,368 Euros, down 2.7pc over 12 months and down a startling 6.8pc compared to September. Significantly fewer, smaller loans means a lot less money chasing property, putting further pressure on prices.

Total new residential mortgage lending in October was 4.403 billion Euros, down 26.4pc in a year. The average new mortgage interest rate was 3.74pc, down 10.7% in a year but up 0.3% in a month.

By Angela | Posted in Economy, General, Health, Holiday, Inspirational, Miscellaneous Articles, Property, Tenerife, Things to Do | Tagged Euribor, Euros, interest, mortgage, prices, Property, rates, repayments, residential, Spain| Comments (1)

Spanish banks relaxing lending criteria

March 14, 2010 – 11:28 am

Spanish banks begin to relax lending criteria

Spanish Banks are slowly relaxing their lending criteria, with one or two offering more attractive deals and higher LTVs. A spokesperson for Kyero explained: “Most banks use a debt / income ratio of either 35% or 40%, although we work with one bank that uses 50%. This really helps those clients who struggle to get mortgages elsewhere due to having a higher ratio of regular outgoings on mortgages, loans, credit cards etc. to net disposable income (the “debt / income ratio”).

“The interest rate is as low as Euribor (annual) + 0,66% (the lowest we have come across to date), with 0,5% bank opening commission and 0% redemption penalty for partial redemption”.

The eurozone base rate has remained at 1% for some time now, meaning that borrowing in Spain is still cheap. With the recovery in Germany faltering and ongoing problems in the so-called PIIGS group of countries (Portugal, Italy, Ireland, Greece and Spain), it is very unlikely that there will be a sudden hike in rates. This more relaxed attitude may help the property market in Spain, Tenerife and the Canary Islands.

By Angela | Posted in Economy, General, Holiday, Inspirational, Miscellaneous Articles, Property, Tenerife, Things to Do, Uncategorized | Tagged banks, borrowing, Canary Islands, Euribor, interest, mortgages, Property, rate, Spain, Spanish, Tenerife| Comments (0)

Searches for international property double

December 17, 2009 – 12:51 pm

In Spain, Tenerife and the Canary Islands, property searches are beginning to increase once more.

The number of searches for international property in November 2009 was double the level of November 2008, signaling that this sector may have turned a corner.

Primelocation International recorded over one million foreign property searches in November, taking interest back up to pre credit crunch levels. Almost one third of searches were carried out for property in Spain, Tenerife and the Canary Islands which has overtaken rival France to become the most popular country after twelve months in second place.

The pent up demand for second home and investment purchases is likely to spill over into increased activity and sales next year if an economic recovery causes the pound to rally.

After a sustained period of rising interest in international property as a whole, I think we can be confident that foreign property purchase is now back on the agenda, in spite of certain barriers such as exchange rates and finance, which may be continuing to stall actual sales.

The total number of searches is almost on a par with pre credit crunch levels and, as the health of the economy continues to improve and consumer confidence returns, we could see a marked increase in market activity next year and a long term stabilisation of prices.

By Angela | Posted in Economy, General, Holiday, Inspirational, Miscellaneous Articles, Property, Tenerife, Things to Do, Uncategorized | Tagged Canary Islands, exchange rates, foreign, interest, international, Investment, pound, Property, purchases, second home, Spain, Tenerife| Comments (0)