Euro loans entice overseas investors to Tenerife.

June 20, 2010 – 5:22 pm

Euro loans helping with purchase of Tenerife and Spanish property

Euro loans helping with purchase of Tenerife and Spanish property

Overseas mortgage specialist, Conti, is convinced that UK overseas property investors who took out euro-denominated mortgages earlier this year are already seeing the benefits. Such a move would not only have allowed them to take advantage of cheap interest rates, but could potentially save significant sums of money if sterling appreciates against the euro over the next few years, as experts predict.

For example, an investor taking out a euro mortgage of €250,000 in February 2010 for a property in Spain, based on the exchange rate at that time of around €1.1 per £1, made a commitment of around £227,000 to pay off the loan.

The exchange rate has since improved to around €1.2 per £1, reducing the cost by £18,000 in just four months.

If the rise continues in favour of the pound to €1.3 over the next two years, the borrower would only have to find around £192,000 to repay the mortgage, reducing the cost by £35,000 in sterling terms, although mortgage costs and notaire fees need to be factored in.

Conti’s operations director, Clare Nessling, comments: “Even cash-rich buyers could consider taking out a euro mortgage until the exchange rate improves, at which point they can pay it back and ultimately reduce the price they pay for the property.”

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

Optimism for Spanish and Canarian property market.

May 30, 2010 – 10:41 am

Optimism returns to Tenerife and Spain's property market

Optimism returns to Tenerife and Spain's property market

The price of re-sale property in Spain and the Canary Islands increased in January for the first time in 24 months, according to   figures and other reports suggest there are tentative signs that part of the country’s battered real estate market is coming back to life.

Prices rose by 0.6% on average, with the regions of Cataluña, and La Rioja seeing the greatest recovery in price at 4.6% and 4.5%, according to figures from the real estate portal fotocasa.es.
 
Property prices also rose in the regions of Comunidad Valenciana, up 2,2%, Asturias up2%, Baleares with a 1,9% increase, Aragón up 1,4%, Galicia up 0,9% and Madrid up 0,7%.

While another index shows that overall Spanish property prices fell by 5.5% over the 12 months to the end of January. However, these figures from appraisal company Tinsa  are based on their valuations, not on actual selling prices. Activity in the real estate market is still very depressed.

The latest figures from the National Institute of Statistics shows that year on year the market shrank by 27% in volume terms to 372,000 transactions in 2009. They have fallen 48% since 2007 when there were 715,000 sales.

December 2009 had just 28,669 home sales, the second lowest level of monthly sales on record. But compared to December last year, sales were down just 1%. ‘That’s because by December last year, the market was already deep in crisis.

From now on, annualised comparisons won’t look so bad, and won’t give any indication how far the market has fallen,’ explained Spanish Property Insight.

‘When the market hit the skids, resale transactions collapsed much quicker than new builds, which outnumbered re-sales throughout 2009. In normal market conditions, it’s the other way around. As 2009 went by the two started to converge, and in 2010 re-sales may once again overtake new builds, though it does depends on whether banks are prepared to lend to resale buyers,’ he added.

Whilst there’s little doubt that life is returning to the Spanish property market, it still remains utterly price sensitive, according to Chris Mercer, director of Mercers real estate agents.  ‘We are making it our business to find realistically priced property from motivated sellers for serious buyers who are in a genuine position to make a purchase. The reality is that decent investment properties are out there, whatever the market, it just takes some expertise and effort to find them.’

If your property is overpriced you won’t sell and you’re wasting your own time and our time, whilst also giving the buyer an unrealistic view of the market. If you’re a motivated seller able to accept a realistic price for your home, we’ll find a buyer.

He also believes that for investors renting to local people can prove fruitful. ‘If you’ve got a 20% deposit then the rent will comfortably pay the mortgage and as you’re truly buying at the bottom of the market, you have an asset that will certainly appreciate in years to come.

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

Britons missing out on £101million each year on international money transfers

May 28, 2010 – 8:22 pm

Poor bank rates and high charges for foreign exchange transactions mean
individuals need to be savvier when transferring money overseas. Research
by Moneycorp reveals that Brits are potentially losing over £101m a year
by not shopping around for the best deals when transferring money abroad.
Furthermore, uncompetitive exchange rates and high bank charges are costing individuals a lot of money, despite a concerted effort by most to reduce their outgoings on luxury and even staple items.

Britons missing out on cash when they transfer money to and from Tenerife

Britons missing out on cash when they transfer money to and from Tenerife

 

David Kerns, Head of Personal Clients at Moneycorp, comments: “While many individuals are visiting comparison websites more frequently, checking voucher code sites and consulting online consumer forums before
purchasing goods in order to save money, this mindset doesn’t seem to have extended to foreign exchange. As a result, individuals are missing out on a very large sum of money they could be saving, by transferring funds
overseas through a foreign exchange specialist rather than a bank. Not surprisingly, high street banks are cashing in as a result of this surprisingly apathetic approach.”

People buying or selling property overseas and people emigrating or repatriating will be particularly affected, though this issue will affect all Brits who are transferring money overseas. People who own additional properties abroad and make regular mortgage and/or utilities payments will also be badly affected, as every transfer is open to individual transfer charges, in addition to exchange rates.

Data from the UK’s number one property website, Rightmove Overseas, reveals that the average house price in the Costa del Sol in Spain is currently €369,860.68. With a deposit of 10% , using a high street bank rather than Moneycorp would cost an individual, on average, an extra  £558 on their deposit alone.

An individual who wants to transfer a lump sum of £100,000 to an account in Europe would lose out on an average of 1,690 by using their bank for the transfer into euros.

David Kerns concludes: “Despite the UK coming out of recession recently, individuals shouldn’t be lining the pockets of their bank managers and it’s in their best interest to maximise their investments. Prior to making any overseas payments, we always advocate that people shop around to get the best rates possible.

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

Confidence grows for overseas buyers

April 12, 2010 – 1:42 pm

 

Confidence grows for overseas buyers in Tenerife

Confidence grows for overseas buyers in Tenerife

 There’s a growing feeling of confidence amongst prospective overseas property buyers, according to overseas mortgage firm Conti. The firm just had its busiest month for almost a year in terms of mortgage ‘go aheads’, the point where prospective buyers take their mortgage quotes through to the application stage. These increased by 48 per cent during March, compared with the previous monthly average. 

The proportion of prospective buyers progressing from the quote stage to the go ahead stage has also increased, suggesting that buyers are becoming more serious about their intended investment.

Despite the turbulence unleashed on the UK mortgage market by the global banking crisis, Conti says that overseas mortgage providers have a healthy appetite for lending to foreign investors. But a combination of factors, not just mortgage availability, are contributing to the attractiveness of this market. Falling property prices, in some cases by up to 50 per cent, and historically low interest rates are making it much more affordable, despite the current strength of the euro. 

Clare Nessling, Conti’s Operations Director, says, “Falling property prices across many European destinations mean that the chance of owning a place in the sun may never be better, and historically low interest rates mean it’s become even more affordable for British buyers. The most popular destinations amongst our clients are still France and Spain, both of which come with easy access and good rental opportunities.

“Confidence is definitely growing, but there’s also an element of buyers snapping up bargains in traditional hotspots while they have the chance.”

Beating the poor exchange rate

According to Conti, an increasing number of British investors buying second homes in Europe are taking out euro-denominated mortgages in order to beat the poor exchange rate. This not only allows them to take advantage of cheap interest rates, but could potentially save them significant sums of money if, as experts predict, sterling appreciates against the euro over the next few years, as this will reduce the sterling cost of the property purchase.

Clare Nessling says, “A euro mortgage could be a good idea, even if you thought you didn’t need one. As you’ll only need to transfer money for your deposit and fees for now, it minimises the amount of sterling you have to exchange for the property purchase. Even if you’re lucky enough to be a cash buyer, it may be worth taking out a mortgage until the exchange rate improves, at which point you can pay it back, and ultimately reduce the price you pay for the property.”

“There are a number of other benefits associated with euro mortgages. If, for example, an investor is going to rent out their property, having a euro mortgage means that their rental income and mortgage repayments are in the same currency, and they can therefore avoid exchange rate fluctuations.

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

New mortgage lending still depressed in Spain and Tenerife

March 4, 2010 – 12:56 pm

Mortgage lending still depressed in Tenerife, the Canary Islands and Spain.

Mortgage lending still depressed in Tenerife, the Canary Islands and Spain.

New mortgage lending in Spain is still very depressed, according to the latest numbers from the National Institute of Statistics (INE).

According to the latest figures, for December and therefore the whole of 2009, new mortgage lending fell again last year, by 22% in volume terms (to 653,173), and by 34% in value terms (to 76.8 billion Euros). These are the lowest levels in both volume and value terms since the INE started publishing this data series in 2003.

The number of new mortgages signed has been falling now for 3 years, and the value of new mortgages has been falling even faster. That means there is less money around to spend on Spanish property, which puts downward pressure on prices.

Mortgage lending has been changing in percentage terms over the last few years - falling in both volume and value for the last 3 years, though the rate of decline improved slightly in 2009. That means it is still falling heavily, just not by as much as last year.

Over the last 2 years, new mortgage lending has been falling more in value terms than in volume terms. That means that the average mortgage value is also falling, as borrowers take out smaller mortgages. The average value of new mortgages last year was 117,688 Euros, down 16% on 2008.

Banks have tightened up their lending criteria, and now demand bigger deposits. But also because Spanish property prices are falling, so borrowers don’t need such big mortgages as before. New mortgage lending is down 51% by volume, and 59% by value, compared to 2006, when the market peaked. That is a massive decline in the amount of money around chasing property

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

Latest Spanish morgage and Euribor news

February 13, 2010 – 1:27 pm

Tenerife and Spainish mortgage news

Tenerife and Spanish mortgage news

 Euribor (12 months), the interest rate normally used to calculate mortgage payments in Spain, fell 0.8% in January compared to the previous month.
- Euribor now stands at 1.232%, the second lowest level on record.
- Last month I reported that Euribor rose a fraction in December, suggesting that, after 14 consecutive months of falls, a change of trend might be in the offing. Despite a return to declines in January, that is still probably the case. Flipping around is often consistent with a period of change.
- After January’s fall, Euribor is now 53% lower than it was a year ago. That means borrowers on annually resetting mortgages can expect some relief in their mortgage payments.
- As a consequence of the latest reduction in Euribor, repayments on a typical mortgage (150,000 Euros, 25 years, Euribor +0.75%) will fall by around 100 Euros a month, or 1,200 Euros a year.
- Most of the savings from the fall in Euribor have already been had, and Euribor is unlikely to go much lower. By March borrowers on annually resetting mortgages will hardly notice any savings, even if Euribor goes a bit lower.
- Euribor is based on interest rates set by the European Central Bank. Base rates are expected to remain at 1% for the first quarter of 2010, rising gradually after that.

Clearly if you wish to buy a new property in Tenerife or mainland Spain now is a good time.

- There were 52,043 new mortgages signed in November, up 1.8% compared to the same month last year, according to the latest figures from the National Institute of Statistics (INE). That is the first time in 2 &1/2 years that monthly new mortgage lending has risen on an annualised basis.
- The average new mortgage value fell by 12%.
- I can once again say that “the good news is the decline in new mortgage lending has been bottoming out in the last few months. If the trend continues new mortgage lending will soon be growing again year-on-year in volume terms. That will give some support to the housing market.”
- But let’s not kid ourselves. New mortgage lending is still a far cry from what it was during the boom, or even what it should be during normal times.

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

Latest interest rates and mortgage news from Spain and the Islands

January 2, 2010 – 12:21 pm

The latest news from Spain and Tenerife's Euribor and mortgage situation

The latest news from Spain and Tenerife's Euribor and mortgage situation

 Euribor (12 months), the interest rate normally used to calculate mortgage payments in Spain, fell 1 % in November to a new record low of 1.231%. - Euribor has now fallen for 14 consecutive months, and is 72% lower than it was a year ago. - As a consequence of the latest reduction in Euribor, repayments on a typical annually-resetting mortgage (140,000 Euros, 25 years, Euribor +0.5%) will fall by around 240 Euros a month, or 2,800 Euros a year.  Economic analysts expect Euribor to stay around current low levels in the months to come. Both Jean Claude Trichet, President of the ECB and Miguel Ángel Fernández Ordóñez, Governor of the Bank of Spain, have said that current base rates are at the “appropriate level”.

 The volume of new residential mortgages signed in September was 62,411, down 4.2% compared to the same month last year. In value terms new residential mortgages were down 16% to 7.3 billion Euros.  The good news is the decline in new mortgage lending has been bottoming out in the last few months. It fell 31% in June, 19% in July, 7% in August, and 4.% in September. If the trend continues new mortgage lending will soon be growing again year-on-year in volume terms. That will give some support to the housing market and if you have a good relationship with your estate agent, they will be able to point you in the right direction, particularly in Tenerife for the best deals available.

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

New trends in property purchase to aid Tenerife?

October 18, 2009 – 12:42 pm

banksspain

New trends in holidays may mean that property purchase in Tenerife can be a wise investment.

The holiday season may be over, but it appears that trips abroad this summer have inspired many of us to buy our own home overseas.

Conti, the overseas mortgage firm, report that they have just had their busiest month since the beginning of the year, with a 20% month-month surge in mortgage quotes issued during September. The value of mortgage applications submitted by the company to overseas lenders also rose to a year high.

As property prices fall across Europe, the chance of owning a holiday home abroad may never be better, and with rates at an historic low, it’s even more affordable for British buyers.

Clare Nessling, Conti’s Operations Director, says: “The ‘staycation’ trend may have reduced the number of  Britons holidaying abroad this summer, but many of those who did venture overseas have returned home with plans to buy their very own place in the sun.

“As the darker nights return and the all-too-short British summer comes to an end, it’s very easy to dream about sunnier climes. But it can be more than just a dream. Affordable prices, low interest rates, and a healthy appetite by overseas mortgage providers to lend, are all making it easier to buy property abroad. Easy access to the more traditional locations like Spain and the Canary Islands, together with good rental opportunities, are also contributing factors.”

According to Conti’s recent hot spots report, they have had 22% requests on property in Spain.  It seems that buyers are sticking to the locations they know and trust and shunning the more adventurous emerging markets like property in Bulgaria and property in Dubai.

Conti says that there’s a growing feeling of confidence amongst prospective buyers, and that savvy investors are more willing to explore overseas opportunities in their search for better potential returns on investment than they are achieving in the UK.

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

Buyers looking at Spain once more

September 23, 2009 – 6:48 pm

Buyers looking to return to Sapin and Tenerife

Buyers looking to return to Spain and Tenerife

Spain was last at the top in June and it returned victorious in August, claiming first place in  a monthly snapshot of the most popular countries, July’s winner, the USA,  was second. Despite being the subject of more bad publicity than virtually any other country during the credit crunch, buyers are starting to look to Spain once again.

Favouring traditionally popular destinations, international buyers are looking once more to markets such as Spain and France and Brits are proving that the love affair with Spain is far from over.

International mortgage firm Conti revealed that interest in Spanish properties accounted for 22 per cent of the total information requests so far this year, second only to France and up from 14 per cent in 2008.

Assessing the prospects for British buyers in Spain, the company said, “Buyers are in a strong position due to the number of homes available, low interest rates and the opportunity to negotiate price reductions from motivated vendors. “Sensible investments carried out on a long-term basis have a good chance of bringing in healthy returns.”

Prospective buyers are now chasing long term gains and as it had been hit so hard by the global recession, prices could remain low and offer good bargain potential for years to come. Cash buyers have been tipped as the ones most likely to be able to pick up a real bargain in the country as they don’t have to worry about mortgage financing, can bargain hard with struggling developers and can move the transaction quickly along.

The TINSA survey, which prides itself on being ‘Spain’s most reliable guide to property values,’ has found that the decline in prices has stabilized.

Spanish cities are tipped for a brighter future over the next few years, with the Assures Financieros Internacionales (AFI), suggesting that property prices in cities may rise to previous levels during 2010.

Once the glut of unsold properties in Spain is shifted, this will help to aid the recovery and push the market back up in 2010. This of course will also help the market in Tenerife too.

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

Investors sticking to proven locations like Tenerife following global market downturn.

September 20, 2009 – 4:10 pm

The index which tracks the level of interest in certain properties and countries from visitors to the site has seen changes.

British buyers stick with traditional locations like Tenerife after the credit crunch.

British buyers stick with traditional locations like Tenerife after the credit crunch.

The United States was knocked off the top spot in August’s Investment Property watch chart 

France, a favourite with British investors and holidaymakers,claimed victory in August.

Industry experts are busy predicting that traditional locations will emerge victorious from the global market downturn and that is good news for Tenerife. Mortgage specialist, Conti, found that British investors are sticking to ‘proven’ locations that offer less risk. Spain is a  traditional hotspot. The credit crunch has been particularly hard on Spain, with hoards of unsold apartments lying unfinished as developers fell foul of the credit crunch. Now, huge discounts have led to the bargain hunters circling again, pushing demand for Spanish property back up.

For France and Spain, enquiries have increased considerably with the countries accounting for 53 per cent of all 2009 enquiries so far, compared with 29 per cent in the same period last year. British buyers are sticking to the more traditional overseas locations, especially those with history of providing good rental returns. The smart investor is no longer simply looking to where the best bargains for a swift return can be found, but to where security lies for a longer term investment and Tenerife certainly meets these criteria. perhaps it is time to visit your Tenerife estate agent and see what bargains are available again.

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