News on the Spanish property market
February 2009 - Rates and prices down
Falling interest rates means good news for mortgage holders. Rates are now at their lowest since October 2005 with mortgages being around 3.5%. This means repayments on an average 25 year mortgage have fallen by 25% from their level six months ago. However, despite the low interest rates, buyers needing to borrow to finance their purchase are finding it difficult to obtain mortgages. This is due to the more cautious approach to lending now being taken by the banks, and indeed to the lack of available funds to give to borrowers.
Both purchase and rental prices continue to fall. Average rental prices in Valencia have fallen by a massive 14.5% in the last year. Tens of thusands of newly built homes remain unsold, and there is little activity in the second-hand market either. But the falling value of sterling against the euro has meant that some British owners can offload their properties at substantially discounted prices and still make a profit on the deal. The weakness of sterling effectively enables those who bought properties with sterling to sell those properties at up to 30% below what they could have sold them for last year and still break even or even make a profit on the deal.
February 2009 - Landsbanski allegation
The fallout from the collapse of the Icelandic bank Landsbanski has reached the Costa del Sol. Landsbanski and two of its subsidiaries are being investigated by a San Roque court following allegations of misleading advertising brought by a legal firm representing 28 victims, all of them British pensioners. It is claimed that products offered were not covered by insurance policies although promotional literature stated that the products were insured. A number of investment resellers are also targeted in the complaint.
February 2009 - Mortgage relief
In an effort to help people who have lost their jobs to keep their homes, the Spanish government plans to increase to three years the grace period allowed for suspension of mortgage payments.
