Today the BBC has 2 positive stories jumping out at me from the Business news page. This surely can't be that unusual, but it seems to be so long since there was good news of any kind, that caused me to sit up and take note. Of course, there's a good half dozen rotten news stories to dampen the mood, but I won't dwell on those today.
The good news stories have an undoubted relevance to the Spanish mortgage and property markets. First of all, the news that new property enquiries in the UK have increased significantly, although sales remain low. This means that these consumers are obviously attracted by the price reductions, and are maybe not so negative about the economy as a whole. As we know, people that are still employed should be much better off because of falling mortgage rates, so it would seem perverse for people with more money in their pockets to be negative for too long.
If there is more confidence in the UK property market, then there will be a knock-on effect in the Spanish market. There are undoubtedly bargains to be found in Spain, and people that feel that the UK market is recovering will have more confidence to invest in Spain.
The news from surveyors in the UK has impacted the strength of the pound, which is of course good for anybody paying a Spanish mortgage at the moment, and also good news for anyone planning to buy a property in the eurozone, as their pounds will buy more euros.
Of course, 1.13 to the pound is nothing like it was at 1.45 a few years ago, but any small rises are welcome.
Then there is a diary entry on the BBC site from an anonymous banker in London, suggesting that RBS are going to be back in the lending arena big time in the next few months, and they may be a month or so behind Lloyds HBOS.
Amazingly, somebody has remembered tha banks make profit from lending money to people! Lending 60, 70, or 80% of the property value to normal people is not high risk business - at least not compared to the sub-prime stuff and other dodgy investments that they were chucking billions at.
In Spain we have Halifax re-entering the mortgage market to a degree, and offering to pick up the tab for the considerable costs of remortgaging, and giving a few years of interest only. They are only doing 60% and are fairly rigourous in their application process. Even so, people switching 100,000 euros mortgage to the Halifax in Spain on interest only at the moment can expect to pay a whopping 217 euros a month for the priviledge. How may people are going to default against that - not bloody many I can tell you, particulary if they had been on a repayment at 5%+ with one of the increasingly unfriendly Spanish banks.
So if you are stuck on a high rate and sending too many hard-earned pounds over in exchange for not-many euros, then give us a call and let's see if we can help - 01621 785204 Thanks for reading.
Wednesday, April 15, 2009
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