The rain in Spain........

A few weeks ago we were in Cartama, Malage, collecting some bits and pieces from our house, and the rain was just biblical. You couldn't avoid getting absolutely drenched. On our return to the UK we booked to come out again on the 4th March, in the expectation that it would be at least dry and sunny, if not exactly sunbathing weather.

How wrong we were, 4 days of useless, wet weather, floods, damp in the house, leaky roof and mud everywhere.

My business partner had been complaining that it had rained since December, and I was starting to believe him.
In every bar and restaurant we went into (there was nothing else to do....) the owners were complaining at the weather and the effect on business, as well as having to stop the rain coming in the roof and doors and windows.

Still the coast seems very quiet in terms of property development and sales activity. Plenty of developments are standing unfininshed, sales offices are closed, and the flags are as limp and damp as the market.

Much talk is of Spain following Greece in becoming an even more high profile EU member in need of a serious bail out.

The rain in Spain - when will it end ?

For rent - House in Malaga with land and stables

This property is available now for long term rent. The cost of livery for horses can be expensive, and there is a shortage of houses available with decent quality stables and flat land suitable for horses.

This property features a 3 bedroom main house, a one bedroom guest cottage, a large office/gym, swimming pool, garage, tennis court, and 3 large stables with rubber flooring. There is 15.350 square metres of flat land, arranged over 2 terraces. Views of the Guadalhorce valley are spectacular.

Offered for rent at €1.000 per calender month. For more details contact chris@europamortgages.com

Pool and terrace with pergola

Large office / gym / games room

Landscaped garden areas with palm trees

From left to right, Guest Cottage, Main House, Office

Demand for goods the problem in UK

In a report from the British Chamber of Commerce, BCC, they have surveyed a number of small and medium sized firms. Lack of credit for the firms is a problem, as the banks keep tight control of the purse strings, however it is a lack of demand from consumers that is giving them real concern.
Is this evidence of a genuine drop in demand and change in spending habits (perhaps not a bad thing) or is it a function of the banks curbing consumer credit, so that people cannot spend on credit like before ?
Either way, the banks seem to hold the key.
From Spain, we hear that the Tinsa property valuations index is now showing the lowest decrease in property prices for a couple of years, showing prices only 13% down from their peak. Quite how this ties in with the demand versus supply of unsold property I am not clear, but prices can only fall so far, before sellers will just not sell. Nobody would sell for less than their mortgage outstanding anyway, and people with low or no mortgages will probably not be too worried about selling.
Thanks for reading.

Eurozone exits recession

Thanks to strong growth in Germany, and also France and now Italy out of recessions, has helped drag the entire eurozone into positive territory.

The problem is that the Eurozone is similar to the football league system, where you would have to say Germany and France are Premier league, whereas Spain have slipped to league 1 and might get relegated further.

The economies of the individual countries are so different that Germany could steam ahead, whereas Spain could be in recession for years.

Problems may occur if the ECB have to tinker with interest-rates to cool some economies, which could screw up any of the economies that are still struggling.

Want a mortgage ? - Tell us how much you drink !

Calls from the FSA for more rigourous affordability checks on applicants that are applying for mortgages, including having to declare in much greater detail personal spending habits and socialising.

I would have thought that lenders, if they are asking to see some bank statements, would be able to see at a cursory glance whether people are drawing lots of cash, or spending lots in restaurants etc. I had a client not so long ago for a mortgage in Spain who had daily debit transactions on his bank statements for an online poker site. Not a crime by any means, but it's a potential risk for a lender.

The other thing in Spain and France which seems to be tighter, is that the concept of lending 5 or 6 times gross income is completely alien. Lending tends to be limited so that the combination of all credit payments for the applicant, are no more than about 35% of the monthly net income.

So, if you earn £2000 per month, then the maximum credit payments you can make are £700. If you have £400 a month already on a loan and credit cards (say) then that leaves £300 available for a mortgage payment.

There are no perfect solutions, and Spanish banks made many other errors in the past few years. But if a system like this is managed well, then it can also stop ridiculaous growth in house prices.

Small Rise in UK repossessions

The number of UK properties repossessed in the period July to September has risen by 3% to 11,700, according to figures from the Council of Mortgage Lenders (CML).

This total is up 5% from the same period a year ago.

But the CML said it was now cutting its forecast for total repossessions for a second time this year, to 48,000.

This is a combination of lender patience, Government measures, and lower interest rates.

As unemployent is still also rising, it will be very interesting to see what will happen when inflation starts to kick back in, as stoked by Quantitative Easing. Interest rates will have to rise and I fear more people will be in trouble, not less.

Thanks for reading. Visit the manin site at Europa Mortgages

Better unemployment figures

Unemployment in the UK is still increasing, but at a slower rate than expected, which is, er, good news.
So, a cause for celebration - more people have lost their jobs, but that's less than we thought.

Ok so I am being facetious. Even so, on the one hand this seems to be regarded as being good news for the economy, whilst on the other hand, Fitch, the credit ratings agency has said that the UK is in danger of being downgraded.

Quite how this all impacts interest rates home and abroad, and the exchange rates, remains to be seen. What does seem clear is that the period of uncertainty for mortgage holders in Spain, France and Portugal is set to continue. Thanks for reading.