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)

Boost for Spanish mortgages?

September 6, 2009 – 4:19 pm

Euribor is now 75% lower than it was this time last year, when it stood at 5.323%, leading to significant savings for Spain property owners with a mortgage.

Mortgage boost for Spain and Tenerife?

Mortgage boost for Spain and Tenerife?

Euribor, the interest rate normally used to calculate mortgage payments in Spain, fell to a record low of 1.334% in August, down from 1.41% in July.

The cost of financing the purchase of a property in Spain has been falling month-on-month for almost a year, with the Euribor having depreciated for eleven consecutive months, setting a new record low in each of the last six months. Euribor has gone from record high to record low in the space of a year.

Thanks to the latest drop in Euribor, the average owner of a property in Spain and Tenerife with a mortgage can expect to save around €316 (£276) per month, or more than €3,800 (£3,230) per year, on mortgages that reset around now.

However, there is evidence to suggest that most banks are not passing on falling rates to customers, opting to raise margins instead.

Mortgage experts do not expect Euribor to drop much further from here, certainly not below 1%.

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

Renting to obtain a passive income

August 28, 2009 – 9:24 pm
Renting for an income in tenerife may not be without pitfalls.

Renting for an income in Tenerife may not be without pitfalls.

Tenants worldwide dream of becoming homeowners, and some homeowners dream of becoming landlords - expanding their real estate ownership while someone else pays the bills. This dream is not hard to realise, but that doesn’t mean it is without pitfalls and easy-to-make mistakes .With hard work (which you’ll have to do yourself unless you use the services of an agency) and knowledge/expertise  being a landlord can be a fast track to passive income and wealth accrual.

A common mistake is that whatever the bank says they’re willing to lend, borrowers typically take their highest offer. While this mistake may not cripple you with your home mortgage, over-leveraging your rental properties is a drastically different story.

With rental properties you have far less control over the associated expenses. For example, if you own five rental properties, and suddenly three of the tenants decide to move - or worse, just stop paying their rent - you will suddenly find yourself with not only your home mortgage, but three additional mortgages to pay. If that isn’t bad enough, you will also be faced with eviction costs, repair and maintenance costs, advertising costs, etc. As a general rule, you want your predictable monthly expenses (mortgage, taxes, insurance, legal entity fees, ground rents, etc) to be no more than 50% of your collectable rent. This is why many people use a rental agency, it takes away the daily grind of looking after the properties.. 

Most landlords simply want the perfect tenants to show up, sign a rental agreement, then pay their rent on time all while keeping the rental property in pristine condition, this rarely happens. Most rental applicants aren’t going to follow this route, again another reason for using an agent with experience to “sniff out” a potential bad tenant

Remember that if a tenant call you to voice a concern, you must listen to them, and then address their concerns immediately (even if that means telling them “no”). If they call to request a repair, send a contractor to the property to assess the cost and seriousness of the problem, and then call the tenants immediately to give them a definite answer on whether and when you will address the problem. Again an appointed agent would handle this for you.

Left unheeded, these small problems and disputes can become major damage to your rental property, or a lawsuit that wastes your time and money. If you haven’t got the required discipline to take care of these matters, then appoint an agent as the normal fee of 10% (normally paid by the tenant) is worth it. We have all heard tales of woe from tenants and landlords and Tenerife is not immune to these problems, but with careful consideration, you can accrue wealth from property investment and lettings.

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

Bank repossessions in Spain and Tenerife

August 22, 2009 – 9:39 pm
Bank repossessions provide great bargains for those with cash in Tenerife

Bank repossessions provide great bargains for those with cash in Tenerife

There was an interesting  article this week in the Spanish daily ‘El Mundo’ about bank repossessions in Spain, and what the 10 biggest lenders are offering investors. It  pointed that Spain’s banks and savings banks – known as cajas – are now the country’s biggest real estate companies. “Nobody knows how many properties they own, not even the banks themselves,” one expert told El Mundo. Their stock of repossessions is growing fast, and is expected to keep on doing so. All thanks to foolish lending in the past.

Banks aren’t, or shouldn’t be, in the property business, so this is a big headache for them. To liquidate their growing stock of property banks start by classifying property as ‘A’ or ‘B’.

‘A’ is new build from developers who can’t repay their loans, good quality, in good condition, and easier to selld, in theory at least. This is reported to make up 70% of the stock the banks now hold. Banks are using their own property divisions – recently set up in most cases - and branch networks to sell this ‘A’ property, offering discounts and preferential financing terms.

‘B’ is made up of repossessions from home owners who can’t pay the mortgage. There are forecast to be 74,000 foreclosures this year, and banks already have 9 billion Euros of bad debts from private owners on books.

Once again if you have cash available then you can bag  great property bargains  in Spain and Tenerife.

 

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

Less mortgages approved in mainland Spain

July 2, 2009 – 12:36 pm
Mainland Spain's property market struggles whilst Thhe market in Tenerife appears to be on the up

Mainland Spain's property market struggles whilst The market in Tenerife appears to be on the up once more.

The volume of new mortgages approved in Spain in April dropped by 42 per cent to 50,288, compared to the corresponding month in 2008, illustrating the extraordinary fall in demand for property in Spain, according to data compiled by the country’s National Institute of Statistics (INE)…

On a monthly basis, new lending fell 4.1 per cent between March and April, while the average value of a new residential mortgage has fallen by 18.4 per cent to £98,324, possibly to reflect the fact that Spanish property prices have fallen, while buying budgets have unquestionably dropped.

The low new lending figures further demonstrates the weak nature of the Spain property market but the latest reports suggest that Tenerife may be over the worst as the pound stregthens against the Euro and prime property is available at bargain prices on the island

INE’s figures suggest that the housing downturn in Spain may still have some way to go on the mainland until the market eventually bottoms out.

The data further shows that the average mortgage interest rate agreed in April to buy a property in Spain was 4.7 per cent, owed largely to low Euribor base rates.

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