Overseas Property Investors Being Fined Under New Spanish Legislation
May 29, 2008
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Property investors in Spain who are not registered within their relevant local tourism authority and let holiday properties to tourists could face fines of up to €30,000 under new legislation.
The Spanish authorities are carrying out thoroughly inspections, inspecting paperwork and even examining websites in an attempt to eradicate what they regard as unregistered letting.
Some cases were even reported by Spanish neighbours, namely holiday properties in the Balearic Islands and on the Andalucía coast.
A large number of overseas property investors declared they bought their second homes for personal use, though, after advertising their Spanish properties on the internet for holiday rental were fully booked for most of the year, generating an average of €1,400 per week extra income.
The law clearly underlines that if a property is let primarily to tourists, should be registered for holiday rentals.
A property consultant based in Ibiza, Gary Davidson, said:
Given the fact that buy-to-let mortgages are more readily available nowadays, many expatriates have been seduced into investing in property in Spain with rental income from holidaymakers paying their mortgage and providing them with an additional income.
Despite this, most overseas property investors in Spain don’t know that they require licensing from the local tourist authorities to rent their property to tourists until they’re hit with legal action.
Popularity: 100%
Bank of Scontland to Review Buy to Let and Self Cert Mortgages
May 6, 2008
Bank of Scotland plans to reprice mortgages from its buy-to-let and self cert ranges in an effort to keep pace with other lenders.
Mortgages from the two ranges will be withdraw today at 5pm, and relaunched with new rates from tomorrow.
The HBOS owned bank refused to comment on what the new rates would be.
Brokers were told in an email 16 mortgages from the bank’s buy-to-let and self cert ranges would be withdrawn.
Bank of Scotland will also cut the maximum loan-to-value on mortgages for new build flats by 5 per cent to 75 per cent.
A Halifax spokeswoman said:
We price in line with the market. Over the past few weeks, most major lenders have increased their pricing on a number of occasions.
It is not appropriate for us to pick up the significant capacity deficit left by lenders who have departed from this market.
Popularity: 85%
Mortgage Approvals Decreased in March
April 23, 2008
March 2008 has been an extremely bleak month for mortgage lending with mortgage approvals declining considerably, according to the latest data from the British Bankers Association.
The major mortgage lenders reported that March has been the lowest month for all forms of mortgage approvals since September 2000. House purchase approvals were the lowest since September 1997. However remortgaging approvals represented 50 per cent of all mortgage approvals.
David Hooks, the BBA statistics director said:
The consequences of low banking sector liquidity show up clearly in March data; reduced product ranges and tighter criteria resulted in slower mortgage lending and significantly fewer loan approvals.
Pressures on personal finances are also constraining demand, not only for mortgages, but also for personal loans and borrowing on cards.
Popularity: 67%
Bank of England Makes Radical Lending Move
April 21, 2008
The Bank of England today announced a radical new plan to help ease the credit crunch by loaning Banks £50 billion.
It announced it would allow banks to trade mortgage-backed bonds, whose deal has become problematic, for specially-issued Treasury bills. This would result in the freeing up of banks’ balance sheets, making it possible for them to lend mortgages to more to households challenged by rapidly diminishing mortgage options and property values.
The swaps are available only for assets existing at the end of 2007, and new loaning cannot be faciliatated by them.
Banks have applauded the Bank of England’s “innovative and unequaled policy response”, and are surefooted that the move will enable them to lend mortgages to more to consumers and home buyers.
Chancellor Alistair Darling has declared that this move is necessary to keep more damage to the United Kingdom economy occuring as a result of the credit crisis, and will provide more details of the plan to MPs in the House of Commons subsequently this week.
BoE Governor, Meryn King, was quoted by Reuters as saying: “The Bank of England’s scheme will lift confidence in financial markets while ensuring that the stake of losses on the loans they have made remains with the banks.”
Popularity: 48%
House Prices for First-Time Buyers in London Rise by 250%
April 17, 2008
New research has showed that house prices for first time London buyers have soared by over 250 per cent in the last ten years. Today the average cost of first time buyer properties is nearly £260,000.
Home buyers getting on the property ladder paid an average of £159,494 for a property in 2007, a staggering 300% jump compared with about £52,674 in 1997.
Nevertheless the average income of a UK family only increased by 53 per cent over the past ten years.
The result is a generation of young people are being locked out of the housing market.
Adam Sampson, chief executive for the housing charity Shelter said:
These new figures show in full the true and worsening situation first-time buyers find themselves in.
Every year the gulf between what first-time buyers can afford and the cost of housing is widening.
Despite falling house prices, many lenders are increasing their mortgage rates, making an already desperate situation worse.
Shelter’s research found that the average first-time buyer home cost 3.4 times average earnings at the end of last year, double the ratio of 1.72 in 1997.
The average monthly mortgage repayment has also soared by 172% from £304.80 to £827.87, taking up 21% of the average working household’s income, compared with just 12% a decade earlier.
Not only are first-time buyers facing higher property and mortgage costs but lenders are also demanding increasingly large deposits.
Popularity: 51%
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