Much of the local property market here in Almeria is driven by external factors ie investment income from countries such as the UK where economic conditions have an impact. The UK is the main driver of the market here, so it's always nice to know what's going on at home as it gives us a little idea of what to expect as a knock-on effect.
Reports from Britain's Royal Institution of Chartered Surveyors indicate that property prices have started to rise again for the first time in 15 months. The three months to November saw 4% more chartered surveyors reporting price rises than falls. October data showed a balance of 8% declines.
Buyer demand has grown steadily over the past six months and the market slowdown appears to be over. Relatively low interest rates and a healthy job climate helped avoid the housing busts that followed previous slowdowns in the 1970s and 1990s.
And inspectors' confidence is at an 18-month high, with November home sales and bank lending figures up. Market conditions are tightening as the number of properties coming onto the market continues to decline, shifting the negotiating initiative back to the seller.
Gordon Brown's decision not to allow residential property to be included as part of a Self Invested Personal Pension (SSIP) has reduced property investment opportunities in the UK and Spain, although RICS does not expect this to impact the market next year. . However, individuals can soon take advantage of real estate investment tax credits by using a Real Estate Investment Trust to invest indirectly in residential real estate.
In the coming year, RICS expects UK house prices to rise by 4% in 2006 and 4% in 2007. RICS has forecast a rise of 3% for 2005 based on the Deputy Prime Minister's Office index, which is likely to be close to the final figure, which will announced in February.
With the housing market showing signs of recovery after a significant decline in activity in the second half of 2004, purchases are also expected to pick up significantly in 2006 after two consecutive years of declines. RICS expects mortgage approvals to rise from a five-year low of 1.127 million in 2005 to 1.336 million in 2006.
The UK is not the be all and end all when it comes to understanding where the local Spanish market is going, but it is positive news for Spanish property prices as confidence returns to the UK market which will have an impact here. !
So chin up homeowners!
Mark Mountney is a partner at Rose Financial Services, a specialist mortgage brokerage based in Parque Comercial, Mojacar. He is a fully qualified mortgage and financial adviser in the UK with around 10 years experience running his own business. Mark was also the founder of the Association of Mortgage Advisers, a trade association for mortgage brokers with 13,000 members.
