Real Estate & Mortgage News in Spain from Propertyshowrooms.com

Santander announces further losses from Spanish property

Tue, 1 May 2012 00:00:00 GMT

Santander saw its first quarter profits fall by 24 per cent, compared to a year earlier, largely due to an increase in its provisions to service bad real estate loans.

The banking group announced it has now set aside €3.1 billion (£2.5 billion) to cover losses on Spanish property assets and other non-performing loans - an increase of 51 per cent from the first three months of 2011.

According to the firm, these provisions were "charged entirely against ordinary profit", while the organisation's loan-loss coverage grew by one point to stand at 62 per cent.

Earlier this month, Santander-controlled Banco Espanol de Credito SA (Banesto) announced an 88 per cent year-on-year decline in profits, which was largely attributed to the bank's €475 million in provisions for bad real estate loans.

This figure is approximately half the amount the financial services organisation is required to set aside by the end of 2012 to help cover its exposure to the Spanish property market.

Distressed Spanish property falls in value

Tue, 24 Apr 2012 00:00:00 GMT

The value of repossessed properties in Spain has fallen by an average of 48 per cent since the finance on the home was issued.

This is the finding of a new report published by Fitch Ratings, which revealed the majority of the mortgages associated with real estate assets included in the study had a loan-to-value ratio of 80 per cent or higher.

Juan David Garcia, senior director and head of the company's structured finance team in Spain, commented: "Fitch expects property prices to continue falling, due to the recessionary environment and severe dislocation of the Spanish property market."

He added the rate at which the price correction occurs will depend on how the banks manage their portfolios of distressed Spanish real estate.

According to the latest data published by Tinsa, average property values in the country dropped by 11.5 per cent between March this year and the same month in 2011. The organisation added the price of homes has declined by 28.6 per cent since its peak in December 2007.

Low-cost mortgages 'drawing in Spanish buyers'

Wed, 11 Apr 2012 00:00:00 GMT

An increasing number of people are being attracted to property in Spain by the low mortgage rates and high loan-to-value ratios offered by the country's banks.

Reuters reported on a deal provided recently by Santander in Sesena, a town outside Madrid, where two-bedroom apartments were on sale for €65,000 (£53,623) with a 100 per cent mortgage over 40 years. As a result, monthly payments on such a loan could be as low as €242.

Speaking to the news provider, Carlos Ferrer-Bonsoms, from Jones Lang LaSalle, commented these low monthly payments are attracting buyers.

"Many promotions that we see are advertising what the cost of the mortgage will be per month, not the price of the property," he explained.

Financial institutions with exposure to the Spanish real estate market are increasingly offering such deals in a bid to clear some of these assets from their balance sheets.

Earlier this month, research firm RR de Acuna & Associados predicted the value of homes in the nation will fall by a further 12 to 14 per cent by the end of 2012.

Mortgage lending in Spain falls

Wed, 28 Mar 2012 00:00:00 GMT

The number of mortgages issued in Spain, as well as the collective value of the loans, fell in January, according to new figures.

Data published by the Instituto Nacional de Estadistica revealed the volume of mortgaged properties in Spain slid by 37.1 per cent between January this year and the same month in 2011, while the overall value of lending declined by 34 per cent.

However, the average amount borrowed by individuals climbed by five per cent on an annual basis - and by 10.6 per cent month-on-month.

Banks still provide the bulk of the home loans in the nation, both in terms of value and number, although the organisation noted savings banks generally offer slightly lower interest rates than their mainstream counterparts.

Earlier this month, director at Conti Clare Nessling pointed out that, while the average loan-to-value ratio in Spain is 65 to 70 per cent, this can be higher in areas where the real estate market has been "more resilient", such as the Canary and Balearic Islands or Madrid and Barcelona.

Spain proposes mortgage changes

Tue, 13 Mar 2012 00:00:00 GMT

The Spanish government unveiled a new voluntary code of conduct on Friday (March 9th) for the nation's banks to follow in relation to foreclosed properties.

Under the new guidelines, homeowners who are struggling to pay their mortgage will be given extra support by financial institutions to help prevent repossessions.

In order to qualify for assistance, which can involve restructuring the loan for a period of up to 40 years, every member of the family in question must be unemployed and the cost of repaying the mortgage needs to equate to at least 60 per cent of their income.

The aim is to allow Spanish property owners to remain in their homes, with the country's deputy prime minister Soraya Saenz de Santamaria pointing out over 1.5 million families in the nation are currently out of work.

At present, evicted homeowners can still be saddled with debt even after losing their property, as banks can demand further payment if the value of the house in question has fallen below the amount remaining on the mortgage.

Since the Spanish real estate market started to decline in December 2007, an average of 25 per cent has been wiped off the value of properties in the country, Tinsa revealed in its January General IMIE Index.

Mortgage availability "surprisingly good" in Spain

Thu, 9 Feb 2012 00:00:00 GMT

There is still finance on offer for buyers who are keen to own a property in Spain.

Operations director at Conti, an overseas mortgage specialist, Clare Nessling told Mortgage Introducer that the availability of home loans in the nation is "surprisingly good, despite the negative reports about its property market".

She explained the maximum loan-to-value still sits between 65 per cent and 70 per cent, but noted this can be higher in regions where the real estate market is considered to be more resilient, such as the Canary Islands and Madrid.

Ms Nessling also pointed out that Spain remains a popular target among overseas property buyers thanks to its accessibility and strong rental potential.

Last month, sales and marketing manager at Taylor Wimpey de Espana Marc Pritchard highlighted Spain's enduring appeal among holidaymakers, noting a predicted influx of tourists in 2012 is good news for the country's real estate industry.

He singled out Alicante as one area to watch, thanks to the growing number of airlines flying into and out of its airport.

Spanish mortgage approvals fall

Tue, 27 Sep 2011 00:00:00 GMT

Mortgages issued in Spain plummeted to their lowest level on record in July, according to the country's National Statistics Institute.

Bloomberg reported that the number of finance packages offered to homeowners during the month dropped by 47 per cent compared to the same time in 2010, while the total amount of capital borrowed also declined by 48.3 per cent.

Meanwhile, the news provider pointed out that there are more than 700,000 properties in Spain that remain unsold, while defaults on existing mortgages are currently high.

Figures published by the National Statistics Institute earlier this month revealed that sales of residential real estate were 34.8 per cent lower in July than a year earlier, while a monthly drop of 8.6 per cent was also noted.

The majority of sales that took place over this period were in urban areas, the organisation added.

However, buyers may be encouraged by an incentive to purchase new-build properties, with the government cutting value-added tax on such dwellings by half until the end of this year.

Spain 'a top choice' for those thinking of moving abroad

Sat, 24 Sep 2011 00:00:00 GMT

Spain has been named among the top five destinations that people would consider moving to if they were going to leave the UK, new research has found.

A survey conducted by Post Office International Payments revealed that the European nation, which was the fourth most popular location named in the poll, was a possible choice for ten per cent of those questioned.

The firm also pointed out that it was the highest-placed nation where English is not the first language.

One of the top reasons given for buying a property in Spain or elsewhere in the world is the chance to have a better quality of life, while other reasons to move included warmer weather, discovering a new culture and the adventure of emigrating.

Mortgage provider Conti published figures earlier this month showing that it has received seven per cent more enquiries about relocating to Spain so far in 2011 than last year.

Overall, the country accounts for 31 per cent of all queries handled by the organisation, with only France garnering more interest.

Spanish banks 'struggling to cope' with real estate losses

Mon, 25 Jul 2011 00:00:00 GMT

Falling property values and rising numbers of foreclosures in Spain are among the factors putting pressure on the country's financial system.

Speaking to Time World, Santiago Nino Becerra, an economist at the University of Ramon Llull, explained that Spain's mortgage market is comparatively small compared to other nations, such as the US.

"With housing values dropping, the banks here simply can't withstand those kinds of losses," he stated.

Mr Nino Bercerra went on to add that because unemployment in Spain is continuing to rise, "when it comes to foreclosures, we're going to see some unbearable statistics".

The country's financial institutions have been under the spotlight of late, due to the economic difficulties being experienced by several members of the European Union - most notably Greece.

Meanwhile, after three major Spanish financial establishments - Caixabank, Bankinter and Popular - published their first half 2011 results today (July 22nd), banks analyst at Nomura in London Daragh Quinn told Reuters that the figures were better than expected.

Zapatero announces plans to prevent foreclosures

Thu, 30 Jun 2011 00:00:00 GMT

Spanish prime minister Jose Luis Rodriguez Zapatero has announced that he will introduce measures to help families avoid losing their homes.

Bloomberg reported that the country's premier has promised to take steps to ease the burden on those at risk of foreclosure, adding that any action will be "compatible with the imperatives of financial institutions' solvency and legal security".

There have been calls for homeowners to be able to cancel their debts by handing over the property to the lender. Under current Spanish law, if a dwelling is repossessed and sold for less than the value of the mortgage, the bank can claim back the difference from other assets and even future earnings.

Meanwhile, an article in The Olive Press on June 24th 2011 published figures from the Bank of Spain, which show that after inflation, house prices have dropped by 20 per cent since the first quarter of 2008.

And the institution predicted that further falls in value across the Spanish property market are likely before the sector turns a corner and begins to recover.

Number of Spanish mortgages falls

Fri, 24 Jun 2011 00:00:00 GMT

The number of mortgages taken out on properties in Spain fell in April by 38.2 per cent, compared with the same period a year earlier - and registered a month-on-month drop of 27.4 per cent.

Data published by the National Statistics Institute also revealed that the average value of mortgages for residential property in Spain decreased by 6.1 per cent in April compared to a year earlier and now stands at €106,889 (£95,327).

Average interest rates on mortgages in Spain had also risen to 4.04 per cent, up by 2.5 per cent over March this year.

In addition, 94.2 per cent of the home loans set up in April were on variable rates of interest.

Speaking to Bloomberg, Javier Diaz-Gimenez, an economics professor at Madrid's IESE Business School, said: "This addition to a long series of negative data confirms Spain's growth is weak, but it is still too early to tell whether the real estate sector is actually worsening."

Buyers 'turning to Spain for property investments'

Thu, 23 Jun 2011 00:00:00 GMT

Buyers looking for foreign property investments are returning to tried and tested markets such as Spain and are hoping to pick up some bargains in the process, it has been claimed.

Speaking to Mortgage Strategy, overseas property and finance consultant Simon Conn explained that people still want to buy houses in familiar markets, adding that, since the economic downturn, only those who are seriously interested in making a purchase are contacting agents.

Claire Nessling, operations director at overseas mortgage advisor Conti, pointed out that low mortgage rates could help attract buyers to the Spanish market, with loan-to-value products of up to 80 per cent available in some cases and rates typically starting from around three per cent.

"In the current economic climate, purchasers are sticking to the more traditional overseas locations, especially those places with a history of providing good rental returns," she told the publication.

Data published by Conti in December revealed that enquiries about property in Spain comprised 24 per cent of the total enquiries the company received last year, with the French, Spanish and Turkish markets collectively accounting for 85 per cent of all queries during 2010.

Prices falls look set to continue in Spain

Tue, 8 Mar 2011 00:00:00 GMT

Overseas and domestic buyers looking to buy property in Spain may be interested in the recent predictions offered by the Bank of Spain.

According to the financial institution, the current fluctuation in home values in the country could be set to continue.

The bank explained that the Spanish economy could be held back for years as a result of the high mortgage debt burden. House prices have fallen 17 per cent since late 2007, the Bank of Spain said.

Additional reports suggest that there are over one million unsold homes currently in the country.

"Looking at previous cycles, the experience of other countries, and indicators of affordability, the adjustment in housing prices could continue," the central bank said in its monthly report in December.

However, a number of real estate portal have reported that enquiries for property in Spain have risen over the past few months, suggesting that cash-rich buyers are looking to take advantage of the current low prices.

Banks to control Spanish property market in 2011

Thu, 27 Jan 2011 00:00:00 GMT

Banks are expected to be the main driving force behind the Spanish property market in 2011, it has been claimed.

Giving his views on the Property Secrets blog, market commentator Daniel Talavera explained that the fact that banks are currently holding the largest property portfolios is likely to work in their favour.

It is generally expected that banks will begin to flood the market with below market value distressed property in order to balance their books.

"Despite the fact that banks portfolios do not seem to be good, generally, they are ready to lend money to reduce their stock as long as the buyer has some payment guarantees. Banks are the easiest option," Mr Talavera said.

The expert added that those looking to buy property in Spain in the coming year should also expect to benefit from reduced prices.

Mr Talavera explained: "Property prices and land prices have dropped in 2010, an average of five per cent to ten per cent in cities; whereas the fall was between 30 per cent and 50 per cent in coastal and second residences."

Unemployment concerns slowing Spanish property market

Sat, 22 Jan 2011 00:00:00 GMT

Concerns over unemployment in Spain have been cited as the reason for declining house sales in the country during November, Bloomberg has reported.

Transactions declined by 6.2 per cent compared to the previous year making it the third consecutive month that sales have fallen.

According to the news provider, the sudden drop in sales also comes as banks slow down their levels of mortgage lending, with many individuals holding off buying a home in Spain until the outlook for employment improves.

"Spain's economy stagnated in the third quarter, leaving the unemployment rate at more than 20 per cent, the highest in Europe," the article stated.

However, the overall economic recovery may be further destabilized by the introduction of the most stringent austerity measures in around 30 years as the government in the country looks to cut its deficit.

Since the market's peak in 2007, a recent survey from real-estate website Fotocasa.es and IESE Business School has found that prices have fallen by 22.5 per cent.

Mortgage payments expected to rise in Spain

Thu, 6 Jan 2011 00:00:00 GMT

A large number of homeowners in Spain are expected to see their mortgage payments rise, it has been claimed.

According to a summary of the latest Euribor and Spanish mortgages by Spanish Property Insight, the move could place further pressure on the country's beleaguered housing market.

Indeed, those looking to buy real estate in Spain could find that the increased mortgage costs lead to further bargain homes coming onto the market, A Place in the Sun reported.

Mark Stucklin of Spanish Property Insight commented: "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 16 per cent in September.

"Significantly fewer, smaller loans means a lot less money chasing property, putting further pressure on prices."

New mortgage lending in October fell by 24 per cent year on year to 39,542 home loans, and by 25 per cent compared to September, according to data supplied by the INE.

Spanish interest rate rise could lead to more distressed properties

Wed, 8 Sep 2010 00:00:00 GMT

Spanish homeowners are likely to see their mortgage payments rise over the coming months after the nation's benchmark rate for loans, Euribor, rose 1.42 per cent in August, which could lead to more distressed properties coming to the market.

The rise marked the first increase in loan rates since October 2008 and is likely to squeeze Spanish homeowners further as almost nine out of every ten new Spanish mortgages are floating rate, reports Business Week.

Repossession orders in the nation already jumped to 27,621 in the first quarter, from 23,433 a year earlier and this upward trend is likely to continue.

"You can't expect Euribor to stay at the current low levels for ever and what really matters now is the rate of ascent," Raj Badiani, an economist at IHS Global Insight in London, told the news provider.

"The last thing Spain needs now is Euribor rising rapidly over the next year."

The troubled real estate market in Spain could provide an opportunity for property investors hoping to find a home in Murcia or find property in Balearic Islands for a bargain price.

Mortgages for Spain are still available

Tue, 3 Nov 2009 00:00:00 GMT

It is still possible to get a mortgage to buy a property in Spain, an expat portal has noted.

Shelter Offshore said that Natwest and Abbey are two UK lenders offering such products.

However, it noted that the Natwest deal has a loan-to-value of only 55 per cent, while Abbey - owned by Spanish banking group Santander - does not disclose terms and conditions before an application.

Despite this, the website suggested, those who can get such finance will find it a rewarding thing to do.

It stated: "The hard work to get a mortgage in place will be well worth it when it pays up and pays off and you have your dream home."

House prices in Spain have now hit the bottom of the market, a spokesperson for property firm Prieto told Reuters recently.

However, the company is forecasting that values will now stay flat until 2011, meaning those who do buy in Spain may find a long-term investment is the most suitable way to enter the market.

International mortgage quotes 'up in September'

Sat, 10 Oct 2009 00:00:00 GMT

September saw a major rise in the number of quotes being issued for overseas mortgages, according to a supplier of such deals.

Conti Finance stated that the tally of requests it received was 20 per cent more than the monthly average for the year so far, while the average mortgage size - £180,000 - was at the highest level it has been this year.

Operations director Clare Nessling stated: "Affordable prices, low interest rates and a healthy appetite by overseas mortgage providers to lend, are all making it easier to buy property abroad."

She added that accessibility and rental prospects are helping to maintain the popularity of France and Spain with investors.

In an article on Conti's own website earlier this week, Ms Nessling said that there are still good reasons to consider buying in Spain.

She stated that while the Costas have declined, there are better prospects to be had in big cities like Barcelona and Madrid, or in some of the islands, such as the Balearics and Canaries.

Spanish mortgage lenders offering alternatives to repossession

Fri, 23 Jan 2009 00:00:00 GMT

Some mortgage lenders in Spain are starting to offer clients struggling to pay the mortgage an alternative to repossession, reports the Spanish daily ‘El Pais’. Solutions include converting to renting with an option to buy, or mortgage holidays that defer payments to a later date. The article describes the experience of Salvador Aguado, who lost his job...

Official Spanish House Price Index falls 3% in third quarter

Wed, 31 Dec 2008 00:00:00 GMT

Average Spanish property prices fell by 3% over 12 months to the end of the third quarter, according to Spain’s official House Price Index, published by the National Institute of Statistics (INE). Having declined by only 0.3% in the second quarter, the index, known in Spain as the Indice de Precios de Vivienda (IPV), suggests...

ECB Cut Interest Rate by 0.75%

Fri, 5 Dec 2008 00:00:00 GMT

ECB cut the cost of borrowing in the 15-nation eurozone by a record 0.75 percentage points to boost business investment and household spending.

The ECB cut the cost of borrowing in the 15-nation eurozone by a record 0.75 percentage points to 2.50 percent as the eurozone faced its first recession while the Bank of England returned Britain to World War II levels with a full point reduction to 2.0 percent.

For the ECB, it was also an unprecedented third rate cut in two months, following a coordinated cut with other central banks on October 8 and another reduction in early November.

"The ECB's 75 basis point interest rate cut comes as a pleasant surprise after recent hints from governing council members that a 50 basis point cut was more likely," said Jennifer McKeown at consultants Capital Economics.

In Stockholm, the Swedish central bank set the tone early in the day by nearly halving its key rate by 1.75 percentage points to 2.0 percent to "dampen the fall in production and employment" due to the global financial crisis.

Repeated and sharp central bank cuts have failed so far to unfreeze the interbank lending crucial to business that ground to a halt after the US market for high-risk or subprime mortgages collapsed in mid-2007.

ECB officials had suggested last week they did not want to use up all their rate cutting options too quickly in case the recession drags on and markets had accordingly anticipated a half point cut.

In the event, the ECB clearly recognised "that we are not in ordinary times and that they cannot afford to keep the same range of policy moves," Bank of America economist Gilles Moec said.

The decision signals that "the best course of action is to go fast and deep, probably on the condition that the relaxation will be quickly taken back as soon as the first signs of recovery appear," Moec added.

"The ECB's reluctance to cut by more than 75 basis points seems to stem from a desire to keep some ammunition back and also concern that too big a cut could hurt confidence," said economist Howard Archer at consultants IHS Global Insight.

The ECB still has ample room for manoeuvre with inflation falling from a record 4.0 percent in July to 2.1 percent last month. It is forecast to drop further as oil and food prices decrease. The bank's medium term inflation target is just below 2.0 percent.

Analysts suggest it could slash its benchmark lending rate to as low as 1.5 percent by March to boost the eurozone economy, which contracted in the second and third quarters and is expected to keep shrinking well into 2009.

European Union data confirmed Thursday that the eurozone economy was in its first official recession since the bloc was formed in 1999.

BNP Paribas economist Clemente De Lucia noted that "leading indicators of momentum in activity reported that bigger gross domestic product falls are likely in the coming quarters."

She said that "growth concerns are mounting" in particular because "the GDP breakdown showed that the weakness was broad-based."

The eurozone economy of 320 million people is set to expand to 16 members and add another 5.5 million when Slovakia joins in January.

ECB forecasts for growth and inflation are also to be released here later on Thursday as the ECB governing council holds one of two annual meetings in a eurozone capital.

During a press conference at which ECB president Jean-Claude Trichet is to explain the bank's decision, analysts will listen for indications of whether the ECB is inclined to cut rates again in the near future.

Story from Expatica

Mortgages issued in Spain falls in number

Tue, 7 Oct 2008 00:00:00 GMT

In the months of July and August, the number of mortgages issued in Spain continued to drop as domestic buyers struggle to get on the housing ladder.Research conducted by the Spanish mortgage association AHE revealed that just over 760,000 mortgages were approved in the first half of 2008 compared with 861,000 in the same period...

Problematic Spanish Property Valuations

Fri, 12 Sep 2008 00:00:00 GMT

Lack of clarity on Spanish property valuations, as seen with Aisa (Actuaciones Actividades e Inversiones Inmobiliarias), will continue to be problematic until next year, market experts told dealReporter.

Experts surveyed by this news service said that in 2009, vulture funds and other bargain-hunters will begin to buy assets from administrators, providing a rock-bottom floor to value other properties.

An expert in property law said that the “underlying problem” in the market is that many valuations are theoretical ones as the flow of deals is so light nowadays that it is extremely difficult to find prices to use as a realistic benchmark for valuation.

Meanwhile, a second expert in valuations said that lack of clarity on valuations has directly caused situations such as Aisa, where the value of the company’s property portfolio is unclear.

Shares in the company have been suspended for many weeks as its auditors will not sign off on the property valuations in its 2007 accounts.

A person close to Aisa said that the situation remains a deadlock, adding that there are “differing opinions” on how its land should be valued.

In 2007, Aisa valued its land at EUR 620m. It recently cut the valuation to EUR 220m.

One of Aisa’s creditors, which wants the company to file for administration, says the land should in fact be valued at EUR 32m, according to press reports.

Spokespeople for Aisa and its auditors, BDO Audiberia, declined to comment for this article.

A third expert, who specialises in property M&A, said that there is enough sustainable demand for new housing in Spain to underpin the market in the longer term, but added that the market will not fully recover until the big overhang of properties already for sale starts to be absorbed.

Meanwhile, the valuations expert said that it is difficult to see any real recovery in the sector as a whole until the second half of next year when property deals start to come through at rock-bottom prices.

The expert said that valuations are currently “much too conservative,” but will start to go up again in the medium term. He added that large numbers of smaller property companies have gone into administration in the last few months and the numbers will be “surprising” when they are eventually released into the public domain.

Meanwhile, the legal expert said that on average it will take some 12 months for administrators to put assets on the market. This expert said that the process is always a complicated one and administrators will try to save as many companies as possible before holding fire sales.

Both experts agreed that once these properties are released to the market and bought by bargain hunters, including vulture funds, it will be much easier to provide reliable valuations for the market as a whole, even if the prices are steeply discounted.

The third expert said that the valuation problem is most acute for land in rural areas, adding that many of the old valuations in this area reflect extremely speculative views.

In the residential sector, the legal expert said that banks have scaled back their mortgage lending because a number of their existing clients are finding it difficult to pay their loans and because of underlying liquidity issues.

The expert said that it is still possible for people to borrow money, but the terms will not be nearly as generous as they were during the boom years. Before prices began falling, it was relatively easy to get 40-year mortgages or loans for more than 100% of the valuation of a home.

The valuation crisis has led to a dilemma for listed property companies in Spain, many of which have had to re-write the value of the properties on their balance sheet. In a number of cases, re-evaluations have triggered clauses forcing companies to renegotiate their debt structures.

The legal expert said that it is difficult to predict which large companies will follow the giant Martinsa-Fadesa into administration.

The expert said that in his opinion the companies which will be safest are those who have diversified, those who are backed by a strong and liquid group of shareholders and those who specialise in industrial and office space, rather than residential building.

Story from FT.com

Bank Guarantee Woe for Buyers

Mon, 1 Sep 2008 00:00:00 GMT

Some Spanish banks and insurance companies are breaching consumer protection laws by stalling, or refusing to honour guarantees for off-plan stage payments, reports the Spanish daily ‘El Pais’.

Bank guarantees are meant to protect the money of people who buy off plan or under construction, and are required by law. If the developer goes bust, or breaches contract by, for example, missing the delivery deadline, buyers can claim back their money, with legal interest of around 6%, from the financial institution underwriting the guarantee.

But, as the Spanish property market unravels, an increasing number of off-plan property buyers are complaining that banks are refusing to honour their guarantees, reports El Pais.

Many are also finding that they were never provided with a guarantee in the first place, in blatant disregard of consumer protection laws. It has even emerged that Martinsa-Fadesa, one of Spain’s largest listed developers, which recently went into administration, failed to provide bank guarantees for many of its clients.

During the Spanish property boom, when prices were rising strongly, bank guarantees were hardly an issue, as most buyers preferred to hang on for their property, rather than get their money back via the guarantee. Few developers were going bust back then. But now that the Spanish property boom has turned to bust, leading to expectations of falling prices, most buyers would rather get their money back, and the list of developers going to the wall gets longer by the week.

“During the boom, developers were delighted if clients backed out and claimed on their bank guarantees,” a consumer association told El Pais. “Developers had buyers queuing up, so they could easily sell the property again for more money. Clients put up with long delays, and it was normal to allow a grace period of 3 months. Now it is all different.”

Consumer organisations and buyers have complained to the Bank of Spain, which claims it has never received this type of complaint before. The Bank of Spain is preparing a report, for release in September, that criticises the practices of certain banks. “We are still looking into some cases, but the conclusion is that some banks have not behaved diligently,” a source from the Bank of Spain told El Pais.

As one unhappy buyer explained to El Pais, the problem is that many developers now don’t have money to pay their builders, and so many buyers are demanding their money back at the same time.

The Bank of Spain is adamant that the financial institutions underwriting the guarantees must pay out in full if developers are in breach of contract. “The financial institution has to ask the developer if there has been any breach of contract, for example a late delivery. If so, the payout should be automatic,” the Bank explained to El Pais. In practise, an increasing number of people are finding that this is not happening.

“The latest thing I’ve been told by the bank is that the developer is their client, not me,” one frustrated buyer told the paper. And clients of Martinsa-Fadesa, or at least those lucky enough to have a valid guarantee, are finding that banks are using the company’s status under administration as an excuse to delay paying out. This is not a valid excuse, according to Fernando Herrero, VP of the Adicae association of bank users. “The law is clear. If the conditions of the guarantee are satisfied, execution is obligatory, regardless of the situation of the developer.”

Full story from www.spanishpropertyinsight.com

Spanish property prices fall 3.9% over 12 months to end of July

Wed, 13 Aug 2008 00:00:00 GMT

Average Spanish property prices have fallen by 3.9% over 12 months to the end of July, according to the latest Spanish property price index published by Tinsa, one of Spain’s largest appraisal companies. Spanish property prices tracked by Tinsa have now fallen for 5 consecutive months. Homes on the Mediterranean coast were the hardest hit...

Developers and banks team up to offer discounted Madrid properties

Tue, 12 Aug 2008 00:00:00 GMT

Spanish banks and developers are offering discounted properties in Madrid. Several leading banks will team up with developers to provide mortgage financing for the newly built homes, which will be available for 20 per cent less than current market costs.

In order to sell the 25,000 new properties in Madrid that are currently without buyers, their developers are promising to sell them at a discounted price, according to Spanish Property Insight. The homes will be sold for a maximum of between €2,000 and €3,000 per square metre.

To ensure that the buyers of the properties can get financing for their purchases, leading banks such as Santander, BBVA, La Caixa, Caja Madrid, Popular and Banesto will work alongside the developers involved to offer mortgage financing.

The exact price of the property will depend upon its district in Madrid, but according to the maximum price limits a 100m² flat would not cost more than €320,000. According to the regional government this represents a 20 per cent discount on current market prices.

This story was brought to you by holidaylettings.co.uk, the UK's No.1 holiday home website.

Developers and banks to offer discounted properties in Madrid

Wed, 6 Aug 2008 00:00:00 GMT

What to do about 25,000 newly built homes in Madrid that can’t find a buyer? On present trends that will be the size of the Spanish capital’s housing overhang at the end of the year, according to developers. Finally, it has dawned on developers that the only way to shift their stock of newly built properties...

Euribor hits new all time high of 5.393% in July

Mon, 4 Aug 2008 00:00:00 GMT

Euribor (12 months) – the interest rate normally used to calculate mortgage payments in Spain – rose to 5.361% in June, the highest level since the Euro was introduced. Euribor has now risen for 5 consecutive months, and is now 18.2% higher than it was a year ago. Compared to June 2004, when it dropped...

Spanish Property Woes continue

Tue, 29 Jul 2008 00:00:00 GMT

Spain’s property market is a mess. Even the most hardened estate agent would have trouble persuading anyone that Spain was a good investment at the moment...

Spain Stops Reassurances as Crisis Deepens

Mon, 21 Jul 2008 00:00:00 GMT

Spain's finance minister Pedro Solbes has stunned the markets with an admission that his country faces the worst economic crisis in its history as the full effects of the property crash spread through the economy.

"This crisis is the most complex we have ever lived through given the plethora of factors on the table at the same time," he told Punto Radio in Madrid, breaking with past efforts to put a reassuring gloss on events.

Mr Solbes said the Madrid bourse had suffered an "earthquake", crashing 27pc since the start of June. He blamed the toxic cocktail of high oil prices, the global credit crisis and the sharp slowdown in the key export markets of North America and Germany.

The comments follow this week's bankruptcy of Martinsa-Fadesa, Spain's biggest corporate failure. The property developer - with an empire of housing estates, hotels, shopping malls and hotels - collapsed after failing to refinance €5.1bn (£4bn) of debts. The company's demise was a textbook story of aggressive over-expansion at the top of the cycle, driven by high debt gearing. It has €11bn of assets.

Mr Solbes has pursued a rigorous "no bailout" policy, saying Martinsa-Fadesa took "excessive risks" and must now face the consequences. He has reportedly clashed with cabinet colleagues, who are now searching for any means to stop the downward spiral in the economy.

El Pais reports that house prices crashed by 20pc in the second quarter compared with a year earlier, based on 183,000 completed transactions.

The Martinsa-Fadesa collapse has sent tremors through the whole property and construction sector. The share price of giant developer Sacyr has halved over the past month.

The two banks with most exposure to the Martinsa-Fadesa are Caja Madrid, at €900m, and Banco Popular, at €400m.

Goldman Sachs has issued "sell" recommendations on a clutch of Spanish banks, including Bankinter, Banco Popular and Banco Sabadell, warning that the sharp turn in the credit cycle could prove worse than the recession in the early 1990s. "The consumer is more leveraged today than in any of the previous cycles," it said.

The ratings agency Standard & Poor's has not yet taken a decision on whether to downgrade Banco Popular and Caja Madrid.

In reality, this is unlikely to be the worst economic crisis in Spain's history. Philip II defaulted on his sovereign debts three times in the 16th century after he bankrupted the Spanish Empire to pay for his Counter-Reformation wars against Protestants. He crippled the Italian banking system in the process - much to the benefit of London and Amsterdam.

Full story from telegraph.co.uk

Santander agrees £1.2bn A&L deal

Mon, 14 Jul 2008 00:00:00 GMT

Spanish bank Santander says it has agreed a deal to buy Alliance & Leicester (A&L) for about £1.26bn...

Property in Barcelona takes 10 times longer to sell than a year ago

Fri, 11 Jul 2008 00:00:00 GMT

New property in Barcelona is taking 10 times longer to sell than a year ago, says the real estate consultancy Aguirre Newman. Thanks to the Spanish property market crash, developers now take an average of 27 months to sell a new development in Barcelona city, and 28 months to sell in the wider metropolitan area...

Spain house sales fall 7.1 pct in April

Fri, 27 Jun 2008 00:00:00 GMT

Spanish house sales fell 7.1 percent year-on-year in April to 55,802 units after a 39 percent fall in March, the National Statistics Institute (INE) reported on Thursday.

Government data also showed a 13.8 percent year-on-year fall in April house mortgage lending to 12.24 billion euros ($19.2 billion), following a 42 percent drop in house mortgage lending in March.

April's lower rate of falls in house mortgage lending and house sales can be partly explained by the fact that Easter was in March this year and in April last year, INE noted.

"This sudden easing is probably due to Easter, and until we see how the index behaves over the next few months we really can't draw any conclusions," said Sergio Diaz from Caja Madrid.

Spain, the euro zone's fourth-largest economy, is suffering a deeper than expected slowdown as the end of a decade-long property boom coincides with the global credit crunch, record oil prices and a strong euro. Housing Minister Beatriz Corredor said on Wednesday the sharp slowdown in Spain's housing sector will be over by the second half of 2009 and called the sector's decline a necessary correction for Spain, where house prices tripled in the decade to 2007.

Expectations of a further Eurozone interest rate rise at next week's monthly European Central Bank meeting to 4.25 percent from 4.0 percent are adding pressure to an already depressed sector. The average interest rate in April for mortgages stood at 5.13 percent, which was 11.1 percent more expensive than a year earlier, INE said.

Full story from www.guardian.co.uk

Buyers offered incentives in Spain

Thu, 17 Apr 2008 00:00:00 GMT

Prospective buyers are being encouraged to purchase a new-build Spanish property by various "freebies", industry analysts have revealed.

According to the Foreign Property Buyer website, some builders are offering incentives such as cars, mortgage perks and even cash in order to attract customers.

This is because the Spanish housing market has been affected by the downturn in the global economy, a development which is directly impacting on their businesses.

While the state of the market may appear to be "bad news" for investors, the website has suggested that investors take advantage of the situation.

Foreign Property Buyer commented: "It is an excellent time to see how many freebies you can get thrown in with your build."

The online portal added that if investors find out what incentives are being offered by companies, they can negotiate for similar perks with their developer.

This comes after the Independent recommended that investors consider purchasing a bargain property in Spain before the housing market picks up again.

UK expats 'happy living in Spain'

Mon, 10 Dec 2007 00:00:00 GMT

Spain is proving to be a highly popular destination among Britons who want to emigrate overseas, according to new research.

UKForex revealed that the country was highly rated by expatriates who had set up home there on a permanent basis, YourMortgage reports.

More than nine out of ten people said they were happy living in Spain, more than the proportion who expressed satisfaction about residing in Canada and New Zealand.

The findings were welcomed by Chris Humphrey, general manager of UKForex, who said that it was "good to see" that the majority of expats believed they had made the right decision.

He added that the number of people emigrating from the UK was likely to increase during the next few years.

This comes after data from the Office for National Statistics showed that the number of UK citizens opting to move abroad permanently reached record levels last year, with 207,000 people leaving the country.

Cheaper countries 'popular with Britons'

Thu, 4 Oct 2007 00:00:00 GMT

Many Britons want to enjoy a cheaper cost of living in foreign destinations such as Spain, a new poll has found.

Currency specialist HiFX said that expenses such as mortgage repayments in the UK were leaving many financially stretched.

As a result, many were said to be considering relocating to other countries in which they would pay less on housing and general expenditure.

A poll by the firm showed that Spain was a particularly popular destination, along with Cyprus, France and Italy.

Commenting on the findings, HiFX director Mark Bodega said: "It would now seem that more and more people are no longer considering emigration as a luxury but a necessity."

However, he added that people had to "do their homework" when considering a move abroad in order to avoid future financial difficulties.

According to Bank of Scotland International, some Britons expats are unaware that they can still claim some benefits from the UK government, even if they are living abroad.

Banco Halifax Hispania launches "switch and save" deal

Wed, 25 Apr 2007 00:00:00 GMT

Banco Halifax Hispania has launched a new "switch and save" service, enabling British expatriates with Spanish property to transfer their mortgage to the bank without paying any switching costs.

The bank will meet the customer's transfer costs, including notary, legal and arrangement fees, and is willing to pay 0.5 per cent towards any early repayment fee levied by the current lender.

As well as fixed and variable deals, one-year tracker repayment and interest-only mortgages are available in euros at a maximum loan-to-value of 70 per cent.

Ian Smith, head of European operations at Halifax, said: "Our mortgage products are designed with British residents in mind.

"We certainly understand the type of mortgage products that British customers require, based on our vast experience in the UK and our knowledge of British attitudes and culture."

All dealings between Banco Halifax Hispania and UK property owners can be carried out in English, the bank said.

Banco Halifax Hispania, which already has branches in Spanish hotspots such as Malaga and Marbella, recently opened a new branch in Calahonda on the Costa del Sol.

Just Who is Paying Your Mortgage?

Tue, 27 Jun 2006 00:00:00 GMT

Rental guarantees sound like just the thing – choose your property investment and the developer guarantees to see to it that you receive a rental income for anything from two to five years. So, simply sit back and watch your investment grow, while your tenants pay the rent and cover your mortgage repayments. Does this sound too good to be true? Rental guarantee schemes have increased in popularity over the past few years as developers continue to create new incentives to attract buyers and on paper they look very good. The developer undertakes to find you tenants and guarantees all payments while all you need to do is hand over the keys for the specified number of years. This is essentially what happens, however, you will need to consider the price you pay for this privilege and bear in mind the following factors: - The developers will have to recoup the cost of their generous offer, namely by including it in your purchase price. Typically many will offer you a gross rental guarantee of say, 5% while the purchase price is quietly raised by 15%, more than covering the guaranteed rental. Therefore you will essentially be paid back with your own money. - Many developers are not interested in obtaining a maximum rental value for your property as they have already more than recouped their money with the sale. You, the owner, might find that when the guarantee period ends, you are stuck with the existing low rental payments which are difficult to increase, while some developers don’t bother renting units out at all. - At the end of the rental guarantee period, you may find that your property is one of many in a glut of properties newly up for rental. Yours may take time to rent or be difficult to shift. - If you are confident you can rent the property out yourself and you have calculated the value of the rental guarantee offer, you may need to ask for this as a discount on the purchase price. However, not all developers are the same and it would be unfair to brand them all as guilty of a scam. In fact, there are many genuine companies who work ethically, serving to enhance investor confidence and continue to provide an excellent product. Look out for the good signs when picking your property. A company offering a good guaranteed rental agreement will: - Not overprice your property by huge percentages to more than cover your rental guarantee. However you will need to bear in mind they will not be giving anything away either. Take, for example, Royal Peninsula’s new development at Medina Elvira, near Granada, Spain. The company policy here is to price all units accurately and openly, so there is no room for discounts. The flip side is that investors are clear about what they are getting for their money; there are no hidden extras and prices remain low. - As is also the case at Royal Peninsula, the guaranteed rental agreement is made on the basis of signed contracts with national and international tour operators. Travel agencies pre-book blocks of the year and supply bank guarantees. - Keep your property permanently occupied with genuine rentals, usually linked with tour operators and holiday lets within a good niche market that will continue to feed your investment. Avoid The Pitfalls The best advice for all investors is to make seven simple checks to be sure your developer is offering a genuine deal: 1. Add up the items making up the price of the terms offered in the guarantee offer, including legal fees, stamp duty and deduct this from the asking prices. This will give you the actual price of the property, which you can then compare with other similar options. This can become a clever bargaining tool. 2. Study the rental market in the area and work out if your property stands a good chance of rental. On what basis are the developers guaranteeing to rent out your property and will you be able to do so when the guaranteed rental period is over? 3. What is the infrastructure like around your property? Will it be adequate for the rental market proposed? 4. Make sure your property is located within an established, or preferably an up-and-coming area which is becoming popular. In this way your property will be commercially viable and a good investment. It must be continually in demand as a holiday home to fetch a fair price. 5. Is the developer obliging you to accept their furniture pack as part of the deal? If so, how much is this really costing you and is it a fair price? 6. Be aware that gross guarantees do not include costs such as service charges, management fees and ground rent, while net guarantees do. 7. Add up the total income from the rental guarantee and make the comparison with a comparable property without a guaranteed rental agreement. If the price difference is greater than the net guarantee, then ask for a discount. So the name of the game is be vigilant and don’t allow a salesman to talk you into a deal that is not worth the paper it is written on. Propertyshowrooms.com has already done all the groundwork for all its investors. With a clear conscience, they will recommend only carefully vetted developments offering genuine rental and investment potential.

Spanish villas and semis increasing in popularity

Fri, 31 Mar 2006 00:00:00 GMT

Norwich & Peterborough survey shows Spanish villas and semis increasing in popularity – but apartments are still tops.

Although most Brits still opt for an apartment when buying a home in Spain with a mortgage from Norwich and Peterborough Building Society (N&P), the popularity of detached and semi-detached villas rose slightly, whilst the number of people buying apartments and terraced proper

Debts will turn family homes into anthills

Tue, 28 Mar 2006 00:00:00 GMT

Rising debts and poor pensions will lead to a new kind of "anthill" family, with many generations living and working together, a report said yesterday."Anthill" households will lead to parents and grown up children pooling mortgages, bills and even pensions so that everyone can retire with a comfortable income. The report, by trend forecasters The Future Laboratory, suggests that families will deal.

No dramatic slowdown in Spain

Mon, 16 Jan 2006 00:00:00 GMT

Mortgage interest rates for buyers of property in Spain are forecast to rise during 2006 but, given the high demand from Spaniards desperate to get on the property ladder and northern European second home buyers, the “slowdown is not expected to be dramatic”.
That’s the view of the Spanish Mortgage Association (AHE) in a report that reveals Spanish buyers have racked-up a record EUR 700 billion in mortgage uptake. In October last year, mortgages reached EUR 705.3 billion, rising 25 percent or EUR 114.6 billion from the month before.
The AHE report predicted the European Central Bank(ECB) would have to raise interest rates later this year in an effort to cool the housing boom, and the association expected a slow down in mortgage lending this year with the prospect of rate hikes.
The ECB recently raised rates from 2 percent to 2.25 percent, the first time it has done this in five years. The one-year Euribor rate – key to mortgages in Spain – is expected to rise to 3.8 percent by the end of 2006. It currently stands at 2.8 percent.
This means people in Spain will have to use eight percent more of their income to pay-off their mortgages on average, typically this will mean a rise of between EUR 10- 60 per month. The slowdown in the mortgage lending is not expected to be dramatic, says the AHE report.
Alberto Linares of MortgagesInSpain said: “This is unlikely to deter British buyers who have already spotted the added value and slowdown in property prices in many areas of Spain. Buying well can more than offset any small increases in the interest rates.”
Last week the Bank of Spain repeated the European Central Bank's claim that Spanish house prices are between 24 and 35 percent overvalued.
The bank revealed that household debt as a ratio of gross disposable income had doubled to more than 100 percent since the mid-1990s. "The Spanish economy and, particularly, its households are now undeniably more vulnerable to adverse developments, especially to a potentially greater-than-expected hike in interest rates.”
Article Source: Spanish Property News

Buy To Let Boom In Spain And UK

Fri, 6 Jan 2006 00:00:00 GMT

Guardamar del Segura Town SquareBuy-to-let mortgages increased by a massive 16% in November, according to lender Mortgages Direct, the financial subsidiary of Spicerhaart.
The rise followed a steady increase over the past six months as many investors were gearing themselves up for the tax-free residential property investment opportunities in Sipps. This has now been snubbed out by the government, as the chancellor scrapped the tax break.
Peter Gladdy, director of Mortgages Direct said: "The original proposed changes to Sipps, where residential property was to become a valid Sipp investment had already boosted the number of buy to let mortgages, as investors were realising the opportunities to boost their pension funds."
"The government’s u-turn on Sipps in the pre budget report is clearly bad news for pension holders who were planning on feathering their retirement nest with tax-free residential property."
Alberto Linares of MortgagesInSpain said: “The steady interest in buying a property in Spain is being maintained as people are deciding to forgo the false promises of the UK Government and buy without the SIPPs tax breaks they expected. They now realise they can buy with a lot more freedom than might have been possible with SIPPs property purchases.
“We expect 2006 will be the year of the serious buyer as people switch their money, allocated to the new SIPPs, into a home they can buy and sell when they want, rent out and use when they want – without the restrictions of redefined SIPPs rules.”
Spanish Property News Article From http://www.propertyinspain.net/

Mortgages cost less as euribor falls

Thu, 16 Jun 2005 00:00:00 GMT

Mortgage rates fall for the second month in a row reaching the lowest level in 13 months according to the euribor mortgage rate indicator. Mortgage rates at 2.193% in May lower even than the end of May 2004 when it stood at 2.29%. It means that monthly mortgage repayments will fall slightly for the first time since last December. The euribor is an average of offered interest rates by the top 60 banks. For the first time ever last year, average debt in Spain exceeded average earnings by around 5% with debt up around 15% compared with 2003. At the end of March 2005, total personal debt in Spain reached a record of €615,132 million despite a fall in the concession of new loans, according to Bank of Spain statistics.

Halifax reduces rates on Spanish property

Tue, 14 Jun 2005 00:00:00 GMT

Banco Halifax Hispania (BHH), the Spanish arm of Halifax plc, has reduced its mortgage rates with immediate effect.

Mortgage rates of 3.265% for loans up to 60 per cent and 3.515% per cent for loans up to 70 per cent of the value of the property are now available.

This comes as good news for those people dreaming of sunnier climes. A growing number of Brits are moving permanently to Spain to escape the British weather, whilst others are buying a second home to spend a greater part of the year there.

Commenting on the latest reduction in interest rates, Ian Smith, Head of European Operations said, “We are continuing to see low levels of interest rates in Spain which makes it an excellent time to finance that dream home in the sun. As we move into generally what is a busy house buying period, this latest reduction in interest rates makes that overseas property even more affordable".

Leaseback schemes cash in on hassle-free factor

Mon, 18 Apr 2005 00:00:00 GMT

HAVING a second home in the sun has become almost de rigueur these days. It's not always a glamorous proposition, however, given the twin hassles of maintenance and letting the property to help pay the mortgage. There is, however, a hassle-free way for private buyers to own a property in the sun, which they can use occasionally and sell on whenever they choose — leaseback schemes. By far the bulk of leaseback properties are in France. The concept was championed in the 1980s by the French government to boost the amount of holiday accommodation on offer in the country. The government continues to endorse the scheme, waiving 19.6% Vat on new properties designated as leasebacks provided they are used as tourist accommodation for 20 years. Purchasers own the freehold and generally lock in to a nine-year lease arrangement with a management company, which handles everything from renting out the properties to the day-to-day running of the development. Leases can be as long as 11 years and are usually renewable. As the properties are specifically geared towards tourism, they are usually located in coastal areas, in the mountains or in Paris. Among the leasebacks currently available from Hamilton Osborne King, for example, are a one-bed apartment in the Alps for €162,166 and a deluxe fully furnished two-bed in Paris for €888,378. Investors can hold their leaseback purely as an income-generating asset or opt to use the property for a few weeks a year. “Sometimes you will get a few weeks' use a year thrown in for the purchase price,” said Stephanie Patterson, an international sales negotiator at Hamilton Osborne King. As might be expected from a relatively low-risk form of property investment, yields are consistent but moderate. “The principal advantage of investing in French leaseback property is the guaranteed rental income, which is generally 4%-6% of the purchase price,” said Fergal Maher, the taxation director of JPA Brenson Lawlor, the chartered accountants. Patterson is more conservative, saying investors should expect yields of 3%-5%. “Yields tend to be a bit weaker at the moment as there is a push to incorporate holiday weeks,” she said. “It might be possible to rent out a normal buy-to-let property for more, but you would be taking on a whole lot of hassle with tenancy issues and maintenance.” Buyers generally take out mortgages from French banks that are accustomed to dealing with leaseback schemes. Rates are low at present, typically about 3.1% for this type of mortgage. “The rental income can be offset against the interest on the mortgage, as can accountancy fees, rates, inspection visit costs and depreciation,” said Patterson. Leaseback properties are suitable for investors seeking a long-term, low-risk proposition. “There is very much a movement from investors towards income this year,” said Denis Cody, a director of investment property consultants InvestorFirst. “People have made equity and they want to use it, not lose it. They want stability in their portfolio and leaseback gives that. It is also a low-risk way for first-time investors to get into property.” Apart from the hassle-free nature of leaseback, another advantage of this style of property investment is that there are no rental voids. “That is the biggest problem with buy-to-let today, not the yields. If you have a two-month rental void out of 12, you can forget about your yield,” said Cody. He adds that investors considering a leaseback property should look at the total projected return, including both the yield and likely capital appreciation. “New investors, in particular, can forget about capital growth and go for the highest income leasebacks, but these are typically purpose-built hotels in less central locations and the property might be worth little more than you paid for it in 10 years' time. Generally speaking, the higher the income, the worse the potential capital appreciation,” he said. Those who buy should also remember to submit an annual tax return. “Because of the complexities of French tax law, owners should appoint a local tax agent to do this,” said Maher. “While French rental profits are taxable in both Ireland and France, they cannot be reduced by losses or tax reliefs attaching to Irish rental property, and vice-versa. Any tax paid in France, however, is allowed as a credit against Irish tax on the same income.” If the property is sold, profits will be subject to French capital gains tax of 16%. This can be offset against the Irish liability of 20%, leaving 4% to be paid to the Revenue in Ireland. If the sale takes place within 20 years of the purchase, remember that the French government will claw back a proportionate amount of the Vat waived at the time of purchase. Maher also points out that property in France is subject to French inheritance tax laws, which give significant rights to surviving children, regardless of the provisions of the deceased's will. If this could be an issue, investors might need to think twice before purchasing a property there. Leaseback schemes have long been confined to France, but in the past year or so they have begun to emerge in other countries, including Spain, Italy and the UK. Of those, however, only the Spanish government waives Vat. Yields and lease terms in all three countries are similar to those in France. A typical leaseback in the UK, for example, is a one-bedroom apartment in Manchester priced at £140,000 (€205,600) with a net yield of about 5%, available through Cody's firm. Above Article from http://www.timesonline.co.uk/printFriendly/0,,1-529-1571954,00.html