| Mortgage rate rises to four year high |
 Mortgage rate rises to four year high
It has now been confirmed that the Euribor rate (that fixes the Spanish mortgage
rates), has risen steadily over the last twelve month. Over this time it has
gained 1.392 percentage points to 3.615% which is a 62% increase in a year.
This now makes it the highest level since July 2002.
This hits anybody with a mortgage. For example monthly repayments on an average
€153,445, 25 year mortgage will rise €113 from €705 to €820.
It is expected that this will negatively impact on the Spanish economy as a
whole, and may in turn lead to a reduction in demand for other goods and services
as these become less affordable.
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| Brits are now saving up |
Brits are now saving up
New figures released by IFA Promotion shows that Brits borrowed just ten pence for every pound they saved during the first three months of 2006. This is a huge difference to the same time the previous year where it was 52 pence for every pound saved.
This has also been backed up further by IFA as new borrowings during the first quarter of this year was at its lowest level since 2000.
The chief executive of IFA Promotion, David Elms also said "The nation appears to be reining in their debt and showing commitment to saving which, overall, is fantastic news to report."
This could prove a sensible move as house prices are still continuing to soar, but by saving more it is allowing first time buyers in particular to raise the money they need for that all important deposit.
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| Scotland House prices could be set for a serious slowdown |
Scotland House prices could be set for a serious slowdown
Unfounded and unrealistic expectations of double-digit annual rises may mean that the next few years may see a housing market bust. This is what the Morgan Stanley chief UK economist and a former adviser to the Chancellor, David Miles is predicting. "a sharp fall in real house prices is likely at some point in the relatively near future, though it could yet be one to two years away".
Morgan is as one of Europe's leading financial experts and is a non-executive director of city watchdog the Financial Services Authority (FSA). He was even commissioned by Brown to review the mortgage market in 2003.
Hi latest report predicts that the current house-price boom will come to an end some time soon and is entitled "UK Housing: How did we get here"
This is the news after many banks, including Abbey National, offer home loans at five or more times borrowers' salaries.
Miles estimates that home buyers are expecting prices to continue rising by as much as 10 per cent a year, compared with only 2 per cent in 1996. Surprisingly he has discovered that under half of the rise in house prices is fuelled by population and income growth. The majority is on this speculation that prices will continue to go up quickly.
Hi views are also predicted eslewhere. PricewaterhouseCoopers the accountancy firm predicts there was a one-in-three chance of UK house prices falling by 2010. The FSA has also warned banks to make sure they could survive if house prices fell by as much as 40 per cent.
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| Lifetime mortgages |
Lifetime mortgages are now 'adding value'
A new study by Norwich Union has found that Lifetime mortgages are becoming an increasingly popular way to add value to homes. With the large increase in property prices, it is not surprising that the study found some 77 per cent of people release money from their lifetime mortgages to make improvements to their home. This has allowed many people a greater quality of life and in some cases has helped with boosting the value of the property.
A lifetime mortgage is when homeowners borrow against the value of their home. The surprising thing is that the home owner only meets the interest payments once the house is sold.
Another means that is already being used and is helping thousands of people is Equity Release.
Daren Carter, the director of sales and marketing at Norwich Union personal finance explains this further. "[Equity release] is already helping thousands of people to make their retirement more comfortable, either by funding home improvements, filling any gaps in retirement income and making it possible for them to go on holiday,"
Improving income (31 per cent) and buying a car (26 per cent) were the two other main reasons behind equity release. |
| Cyprus property market |
The Cyprus property market is being driven by a big change before the entry of Cyprus into the EU, where it is expected that the Cypriot pound will be changed to the euro in early 2008.
There is only the possibility of building 4,000 homes a year by the Cyprus construction industry andbecause high prices in Spain are driving many buyers to look to this island
This means that demand is still outstripping supply.
The prices on the island will increase over the next 2 - 3 years due to extra demand. Property is still cheap relative to Spain so the gap is bound to close. Anyone investing now has a good chance of making a profit, particularly if they buy off-plan.
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| Low cost village housing plans for the UK |
Low cost village housing plans for the UK
The UK Government has indicated that a low cost, low-carbon village could be the plans for housing in the UK.
David Miliband, the environment secretary and Yvette Cooper, the housing minister have both called on developers to design housing that will emit low levels of carbon at a low cost.
Ms Cooper told a meeting of the Green Alliance that if the scheme proves a success they hope future housing developments will follow that are more sustainable and affordable.
"We need to build the new homes that the next generation needs, but we must ensure that they are sustainable for the next generation too,"
"Instead of using the challenge of climate change as an excuse to prevent new homes and jobs we need to use the opportunities of new development to raise standards, transform the market and the way we build."
The proposal to see the creation of 120,000 new homes and 180,000 jobs is called 'The Thames Gateway'. This is thought to be central to the government's low-carbon housing hopes. |
| Skyrocket in US New Home Sales |
Skyrocket in US New Home Sales
• Biggest jump in 13 years
• However, mortgages and excess supply up
According to government figures, the US new-homes market had the largest jump in 13 years, despite rising mortgage rates in March this year. To the end of Marh, new homes sold at an annualised rate of 1.21 million which was an increase of 13.8 per cent over February’s figures, and is well ahead of industry predictions.
A drop in prices is being attributed by many especially after slow figures in preceding months and a large supply of properties on the market. A report on CNNMoney reported that the average sales price in March dropped by over 7 per cent to $279,100 (£151,000). This was after the sharp rise in February which saw the average price rise above $300,000 for the first time. There there were over half a million new homes on the market in March.
Freddie Mac, a US mortgage agency, has reported that the average interest rate on a 30-year fixed-rate mortgage rose to 6.32 per cent in March, placing rates at almost their highest point since the 11 September attacks.
Even with these mixed messages, the US real estate market still is cinsidered to be proving extremely attractive for many, and more so for one couple in particular. Moya Doherty, the founder of ‘Riverdance’, and her husband John McColgan have bought a house on exclusive Martha’s Vineyard for $25.17 million (£13.6 million) – a record for the celebrity getaway hot spot.
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| NEW ZEALAND MARKET ENJOYS RECORD APRIL |
NEW ZEALAND MARKET ENJOYS RECORD APRIL
New Zealand house prices have reached new record levels in April, this is despite many analysts predicting the market would slip especially as they are following similarly record-breaking increases in previous months. The Real Estate Institute of New Zealand (REINZ), has released figures showing the average New Zealand home has reached NZ$305,000 (£104,000) which is up from $272,000 one year ago.
New Zealand’s largest city, Auckland, has risen to $430,000 (£147,000) . This is nearly a 5% increase in a month – central Wellington values dropped slightly to $407,750 (£139,000) after a record-breaking March. Taranaki recorded the biggest annual rises, which saw capital growth of 47.56 per cent over the year. Wellington prices rose by 21.81 per cent over the year.
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| Major Development Near Paris |
Major Development Near Paris
· Project in Massy worth £144 million
· A mix of private homes and commercial property to be built
There has now been an agreement reached for the creation of a new large-scale
property project in Massy, near Paris. The two groups involved are the US fund
management group Colony Capital and the Spanish development and investment giants
Fadesa. This agreement was announced at the beginning of the month and will
create a to be named project that is expected to cover a six-hectare plot currently
owned by communications company Alcatel.and floor space of close to 100,000
square meters.
The project is expected to be completed in 5 years and will consist mainly
of private homes with the balance in commercial property. It is to be built
by Fadesa’s French arm Financiere Rive Gauche with a cost of approximately
£144 million. Property values in and around Paris rose by 15 per cent
last year; no announcement regarding the price-range of the properties to be
developed at the Massy site has yet been made.
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| Slower Growth in South Africa |
Slower Growth in South Africa
· Appreciation at 12.8 per cent at end of April
· Lowest year-on-year growth since 2000
In April it appeared that the South Africa property boom began to slow. This is supported by figures that have been released by ABSA (Amalgamated Banks of South Africa) the South African banking giant show. The figures showed that annualised growth for April was 12.8 per cent, which is down from the 13.7 per cent reached in March. According to ABSA, this is the lowest year-on-year growth figure recorded since the beginning of 2000.
Price growth with consumer inflation taken into account or 'Real price growth' was at 10 per cent in March, which is also down slightly from April’s figure of 10.2 per cent. Even with this data the ABSA report still concludes that overall growth in 2006 should be around 12 per cent.
The affordability of a typical home in South Africa was also examined in the ABSA report. It indicated that the monthly income required to afford mortgage payments for the average home increased by11 per cent over the year.
The report said “Although housing is, in general, still less affordable than a year ago according to this analysis, the rate of deterioration has decelerated significantly during the last 12 months,”
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| New Network for Property Lawyers Launched |
New Network for Property Lawyers Launched
Property Lawyers Abroad Network (PLAN) is a new organisation that was was launched last week. This is aimed at providing independent legal advice to the UK’s international property consumers.
PLAN has members in 30 countries across the world including favourite hotspots such as Spain, Bulgaria and Dubai and is to be a management company for individuals looking for reliable independent lawyers in overseas buying locations.
A code of practice has been created ststing all members of PLAN must speak English, have experience in their local property markets, be able to provide good client references and have a presence in the UK.
Michael Masterson is the managing director and has said that his organisation aimed to facilitate the buying purchase for individuals who might otherwise “struggle with an unfamiliar language and culture”.
“For many people, buying a property abroad is a dream that so often turns into a nightmare. We set up PLAN because we recognised that there was a real need for a service that took away the burden from the consumer of finding a lawyer that they could rely on and trust,”
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