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Foreigners now make up 8.5 per cent of the Spanish population of just over 44 million, according to the latest figures.

The population has risen by 910.000 in just under a year - an increase of 2.1 per cent. There are now 3,370,610 foreigners registered in the country out of a total population of 44,108,530.

The number of foreigners has risen by 696,284 since February last year, an increase of 22.9 per cent. In comparison, the number of Spaniards has gone up by only 214,562 or 0.5 per cent.

Catalonia saw the biggest rise in population (181,887) followed by Andalucia (162,281) then Madrid (159,314) and in the Valencia region (149,145).

Moroccans are the largest national group in Spain with 511,294 registered, followed by those from Ecuador (497,799) then Romanians (317,366) and Colombians (271,239).

Closely following that, the number of Britons now stands at 227,187, followed by Argentinians (152,95) and Germans (133,588).

The figures were issued by the National Institute of Statistics.

From The Euro Weekly News

The beautiful whitewashed town of Alhaurin el Grande is located at the foot of the Sierra de Mijas mountain range in the Malaga region of Spain.
It offers wonderful views over the stunning Guadalhorce valley, which is made fertile by the rivers Pasadas, Fahala, Jurique and Torres that flow through it. In fact, the region produces an abundance of fruit, vegetables and cereals, and boasts numerous olive groves.

View properties for sale in Alhaurin el Grande

During Roman times, the settlement was thought to have been blessed by the gods due to its fertility, favourable climate and proximity to precious mineral deposits. This led the Moors to later name the town Alhaurin, literally meaning the Garden of Allah.

The town has undergone many tribulations, including an earthquake in 1680, various plagues, and numerous invasions and occupations by the French, Romans, Moors and others. Today, it’s a prosperous town with a population of 27,000, of which roughly 2,000 are foreigners.

Why buy there?

Only a short drive from Malaga’s famous beaches, and close to the Sierra Nevada ski resorts, Alhaurin el Grande is perfectly situated for those seeking a traditional area untouched by tourism, yet close to all the attractions and amenities of the Costa del Sol. It’s close to Malaga’s major cities, being just south of Coin and north of Mijas, and it’s only 15 kilometres from Malaga airport. It lies in an area of outstanding natural beauty, with a number of lakes and waterfalls in Barranco Blanco, while to the southeast are extensive forests, pock marked with Neolithic remains.

Alhaurin el Grande enjoys an average annual temperature of 17 degrees Celsius, and is a pretty town with whitewashed houses and colourful shutters. There are a number of attractions, including the 12th century Moorish Archway, the old Arabic fort and the Plaza del Ayuntamiento, with its Roman columns and town church. The Churches of La Ermita de San Sebastian and El Convento y las Agonias are also well worth visiting.

The town is famed for its many traditional celebrations, including the Feria de Mayo and El Dia de la Cruz in May, Dia de Jesus in June, and the Dia de la Virgin in August. In addition, the Easter week celebrations attract tourists from across Europe. Improvements are currently being made to the areas infrastructure. However, there are already two golf courses nearby, while the surrounding countryside offers plenty of hiking, cycling and climbing opportunities.

Where to buy

Within Alhaurin el Grande, there are a number of properties to choose from, in fact, one estate agent alone has over 400 properties on his books. For 165,000 Euros, you can find a four bedroom townhouse, while out of town, a semi detached finca can be yours for as little as 184,000 Euros. At the other end of the scale, if your budget allows, you can choose to purchase an exclusive villa, with a swimming pool and 25,000 square metres of land, for 435,000 Euros. Alternatively, 250,000 Euros will get you a two bedroom villa located in one of the town’s urbanisations.

There are also a number of bargains to be had in the surrounding areas. Northwest of Alhaurin is Coin, which has a foreign population of over 1,700. This is a busy commercial town with a number of attractions, including the famous shrine of Nuestra Senora de Fuensanta.

View properties for sale in Coin

Popular with English buyers, there are many traditional properties for sale, with more modern developments also springing up around the town. Prices start at 58,000 Euros for a plot of land, while a three bedroom apartment can be found for 89,000 Euros. A renovated townhouse costs around 230,000 Euros.

Recently, there has been a boom in developments in Alhaurin de la Torre, which is situated to the east of its namesake, Alhaurin el Grande. With citrus groves and avocado orchards providing a stunning backdrop to the residential areas, around 1,700 foreigners live here, and you can buy a townhouse requiring renovation for around 148,000 Euros.


View properties for sale in Alhaurin de la Torre

The small town of Alora, 40 kilometres north of Malaga, is a typical pueblo blanco (whitewashed village). With 1500 foreign residents, this tiny village is set on a hilltop, boasting spectacular views and traditional values.

There are a number of plots of land for sale, all with stunning valley views, and a plot of 3,000 square metres costs as little as 50,000 Euros. A country house can be yours for a mere 70,000 Euros, while a three bedroom village house sells for an average of 300,000 Euros.

View properties for sale in Alora

The property market

Over the last few years, inland Spain has seen demand for property rise steeply, fuelled by foreign buyers. Some areas have seen appreciation reaching 35 per cent per annum as investors attempt to find a more authentic, rural lifestyle. These high rates of appreciation, coupled with affordable property, make the area an excellent investment.

The increased number of budget flights to the area has also helped to fuel this demand, as has recent investment in infrastructure. Improvements include the arrival of the bullet train, which now travels from Madrid to the city of Bobadilla, and the opening of an international airport in Antequera. Consequently, areas within commuting distance from Malaga, such as Alhaurin and the Guadalhorce Lakes, have seen a huge rise in popularity. Of course, with over 2.6 million foreign residents in Andalucia, it’s also not surprising that many buyers have been forced inland.

There are many nationalities purchasing property in Alhaurin, and demand from foreign buyers is high, especially within urbanisations such as the Alhaurin Golf and Country Club development. With strict building regulations in place, fincas to renovate and traditional whitewashed townhouses and extremely popular, and this has caused prices to increase significantly in recent years. Nevertheless, property in this area remains significantly cheaper than on the coast.

Prices have been going up by between 17 and 20 per cent annually, yet compared with the coastal resorts, the cost of a property is a staggering 30 per cent lower inland.

For example, a two bedroom apartment in Marbella will set you back by an average
of 378,936 Euros, while in Alhaurin, you can buy a similar property for 153,000 Euros.

Typical properties

There’s a healthy mix of the old and new in Alhaurin. Property in the area includes newly built apartments in the centre of town, while there are a number of villas available in the urbanisations on Alhaurin’s outskirts. Look outside of Alhaurin’s boundaries and there’s a plethora of cortijos and fincas to be found in the surrounding countryside.

Most buyers are looking to purchase a traditional country home, complete with two acres of land and some fruit trees. Wherever you buy, given the geographical situation of Alhaurin, property is virtually guaranteed stunning views of the surrounding mountains and valley.

Lettings

Inland Spain is a popular holiday destination, especially inland Malaga. It’s important to recognise that the lettings market inland is different to the coast, though. Long term lets are more infrequent and the short term rentals market is limited by the longer winter season. However, with a significant increase in the number of eco tourists, 7.2 per cent in the Andalucia area alone, inland regions, with their numerous activities, have reaped the benefits.

Property to rent in Alhaurin el Grande

The income you can generate varies drastically, but a three bedroom country house can provide between 1,200 Euros to 1,500 Euros a month, while a townhouse can earn you up to 800 Euros a month.

If you live in the Guadalhorce valley, you’ll find that you’re never more than 25 minutes from the coast, which makes this area hugely popular among tourists. Consequently, it can be very profitable in terms of rental income As well as offering a healthy short term market, there’s also a strong long term rentals market, as many potential buyers arrive in Alhaurin with the intention of renting for between six months to a year before they buy. However, most owners will only allow long term rental contracts over the winter period to avoid eating into the more lucrative summer months.

Living there

An area of outstanding natural beauty, life is lived in a traditional Spanish vein in the Alhaurin area, with centuries of culture and tradition evident. In fact, values reflect those seen 30 years ago in the UK. Even though the town of Alhaurin has become very cosmopolitan, and there are a large number of foreign residents living there, life maintains a Spanish feel. This is enriched by the local cuisine, such as migas (breadcrumbs fried with garlic) and gachas cachorrenas (porridge with spices).

The local population refer to Alhaurin as ‘inland Marbella’ due to its thriving economy and beauty, and the local government is currently undertaking a project to develop the town, with plans for many new facilities. It already boasts a great selection of bars, clubs and restaurants, which makes the area great as a family holiday or rental destination.

Fans of outdoor activities will find that there are many leisure activities to pursue, while the beach is only 15 kilometres away. There are local and international schools in the region and both private and state healthcare are available.

Despite there being a cosmopolitan mix of nationalities, it’s still important to learn the language and make a real effort to integrate yourself into the local community. That way, you can make the most of living in a traditional and welcoming environment.

John and Lynda Laver decided to leave their Bedfordshire home for warmer climes and a more relaxed way of life. Both had stressful jobs in the UK but neither of them felt ready for early retirement they just wanted to work fewer hours and spend more time together, and with their family. They settled on Spain, but from there it was important to ensure the area they chose was accessible, as they had a daughter with young children who needed to be able to reach them easily. John and Lynda had visited the Costa del Sol many times but didn’t want to live in the busy coastal area, instead seeking a location that offered a more Spanish lifestyle.

“A friend recommended that we look inland from Malaga Airport, and suggested towns such as Alhaurin el Grande, Coin and Monda. What we found was the Guadalhorce Valley, an area largely untouched by tourism, with stunning villages and countryside,” says Lynda. They knew it was exactly what they were looking for, and had soon purchased a brand new, four bedroom house in the countryside surrounding Alhaurin el Grande.

It came complete with an acre of land, fruit trees and a working well. John enthuses: “We’ve spent many hours working on the landscaping and have now created a beautiful home where many of our family friends have spent happy holidays with us.”

Since moving to the area, both have found work, with John servicing swimming pools and offering his services as a maintenance man, while Lynda organises the rental of their second property in the Alhaurin Golf and Country Club. “The daily cost of living in Spain is a fraction of that in the UK,” says John, “so we can now afford to spend more time doing the things we want to do, like spending our lunch times enjoying a three course meal in the local taverna!”

Special thanks to David Laver of Grupo SI for his help with this article.

Latest statistics from the Spanish government reaffirm the fact that the country remains one of the most sensible options for UK residents looking to enter a foreign property market.

Though Spain may no longer dominate the attention of British investors in the way it did in the 1990s, the consistent growth of the market and the inexorable popularity of the country as a tourist resort and second home haven mean that astute investors are continuing to make enviable profits from their ventures.Government statistics show that house prices in Spain increased by an average of 12.8% in 2005.

This is admittedly down on the 17.2% increase in 2004, but it has been welcomed by government officials and investors alike.

The director general of Architecture and Housing Policy, Rafael Pacheco, has celebrated “more reasonable” increases while property investors appreciate that a 12.8 per cent rise shows that the market is remaining strong and has avoided a crash.

Furthermore, with developing property markets such as providing increased competition, Spain now has to prove it can remain competitive, so the more sensible price increases may prove to be beneficial to the long-term strength of property investment within the country.

full story from the Economic Times

It is understandable that many people investing in property for the first time are tempted to limit their search to the UK, but experts have been highlighting the advantages of looking abroad for both residential and commercial investments.

The property market in the UK has admittedly returned to good health in recent months with buy to let investors expecting high yields and rising house prices meaning incisive investors are likely to make considerable returns on residential properties.

Investment returns on commercial property meanwhile finished the year at 2.7 per cent in December, which translates into a 12 month return of 18.8 per cent.

With this in mind, entirely abandoning the UK as a property investment location would be senseless. On the other hand, it seems many UK residents are still failing to even consider the potential benefits of investing abroad, with commercial property a good example.

In an article in the Financial Times, property correspondent Jim Pickard refers to the fact that very few Britons have even heard of the fact that Spanish property company Metrovacesa paid 5.5 billion Euros for its French counterpart Gecina in March last year and he cites this as an example of the insular and blinkered view that many UK residents have on the property market.

Mr Pickard suggests that the introduction of real estate investment trusts (REITs) next year will “internationalise the market even further” and he suggests it will put an end to the “parochial” attitude to investment that he believes is rife in the UK.

He indicates that the specialist nature of the property industry is to blame for the philosophy, arguing that the while the UK may sometimes provide the best investment options, it is important not to miss out on opportunities further afield.

“Retail park experts can tell you about the square footage of a carpet barn in Huddersfield. Industrial warehouse types can tell you the typical yield on a Hastings logistics shed off the top of their heads,” he said.

“Residential apartment experts know where prices for Liverpool penthouse flats are going, although they may choose to keep this information to themselves.

“As a result, many property types have become almost stereotypical Little Englanders, closing their eyes to goings on on far off shores.”

In terms of residential property, a survey by Barclays in November last year found that the number of UK residents owning a property abroad was set to double to around 4.4 million in the near future.

Interestingly, a staggering 37 per cent of those questioned said that they were considering buying a property abroad, although it seems that many felt they needed more information before making the decision.

Predictably, Spain was found to be the most popular country for foreign property investment, as Britons look to capitalise on rapidly rising prices and high levels of demand in areas such as Valencia, Alicante and the Murcia region. France came third in the list with houses in the Languedoc area and ski properties in the Alps continuing to prove popular.

In eighth place in the list but gaining in popularity annually, Bulgaria is also an option to investors looking for a break from the norm, led by the popularity of Black Sea locations and a flourishing ski industry in resorts such as Bansko.

Story from Assetz News

The latest statistics from the Spanish government reaffirm the fact that property investment in Spain remains one of the most sensible options for UK residents looking to enter a foreign property market.

Though Spain may no longer dominate the attention of British investors in the way it did in the 1990s, the consistent growth of the market and the inexorable popularity of the country as a tourist resort and second home haven mean that astute investors are continuing to make enviable profits from their ventures.

Government statistics show that house prices in Spain increased by an average of 12.8 per cent in 2005. This is admittedly down on the 17.2 per cent increase in 2004, but it has been welcomed by government officials and investors alike.

The director general of Architecture and Housing Policy, Rafael Pacheco, has celebrated “more reasonable” increases while property investors appreciate that a 12.8 per cent rise shows that the market is remaining strong and has avoided a crash.

Furthermore, with developing property markets such as Bulgaria providing increased competition, Spain now has to prove it can remain competitive, so the more sensible price increases may prove to be beneficial to the long term strength of property investment within the country.

Significantly, investment in Spanish property is also likely to be made more desirable because of the decision by the European Commission to refer the Spanish government to the Court of Justice because of allegations of prejudiced property tax laws.

At the moment, Spanish residents are required to pay 15 per cent tax on gains from property sales, whereas non residents are taxed at rate of 35 per cent. If the Court of Justice rules that this is indeed discriminatory, investors from abroad will look forward to much lower taxation levels which will clearly benefit those hoping to sell on properties in Spain.

Full story from Assetz News

If you are a long-term Spanish resident, it is likely you will come across inheritance and gift tax. Here are the details.

Inheritance tax is payable on the increase of wealth, obtained by reason of death. Gift tax is levied on the increase of wealth, produced by reason of gift while the transferor is still living.

Inheritance and gift tax are levied on the following:

The acquisition of assets and rights by way of succession. Foreign people must pay inheritance tax in Spain only for those assets the deceased left in Spain.
Obtaining assets and rights by way of gift or any other gratuitous transfer inter vivos (during transferor’s lifetime).

Acquisition of revenue from a life insurance policy, where the contractor party is a different person from the beneficiary. Payment of this tax is not made by the estate, each beneficiary must pay it individually. It must be paid by:

The inheritors, who acquire the assets by reason of the decedent’s death. The tax is payable by the beneficiaries and not by the estate. This tax shall be paid before the beneficiary can deal with the deceased’s assets. When it is the inheritors’ decision to sell the assets that the decedent left in Spain, they first must pay inheritance tax.

It is advisable to seek the assistance of a Spanish Lawyer in order to speed up the procedure and get advice on potential tax saving schemes.
The grantees, who acquire the assets by reason of a gift or gratuitous transfer inter vivos (among people still alive).

Full story at SpainLawyer.com

It appears that the discriminatory property tax in Spain will finally be addressed after the European Commission announced it is to refer the Spanish government to the Court of Justice.

The current complaint is that official Spanish residents are only required to pay 15 per cent tax on gains from property sales, while non residents are taxed at an astounding rate of 35 per cent.

Figures from Sociedad de Tasacion recently showed that property prices in Spain’s provincial capitals increased by 10.1 per cent last year, indicating that the impact of the unfair taxation system has not managed to damage the country’s property market beyond repair.

Nevertheless, there has been a slowdown in growth over the last few years and an increasing number of UK property investors have complained that the system is simply stifling investment projects.

If, as expected, the Court of Justice rules that Spain has been flouting European law, the government will have to reform the entire system and reduce tax rates for non residents.

The impact on property investment in Spain is likely to be immense, as UK residents in particular return to their favourite investment location, safe in the knowledge that they will not be taxed extortionate amounts when they decide to sell a property.

The news comes just a week after Standard & Poor’s chief European economist Jean Michel Six tipped the property market in Spain to enjoy a strong 2006 and so a prospective alteration to the taxation system can only add to the optimism. Mr Six has predicted “healthy growth” throughout 2006 and believes Spain to be “certainly a market to watch”.

A number of experts have recently highlighted the Costa del Azahar as a particular area of growth and those looking to make significant gains may make the most of the prospective tax alterations by snapping up property at competitive prices in the coming months.

The area will also be boosted if the Valencia ‘land grab’ law is changed although the Spanish government has been slow on reacting to advice from the European Union on this issue too. Currently, property investors and holiday homeowners are often charged for local developments without any prior warning while others are forced to forego sections of their land without compensation.

From Assetz News

EVIDENCE the housing market is picking up has been reinforced by the strongest December mortgage lending on record.

Conviction that interest rates have peaked and faith in steady house price growth for the year ahead supported the healthy homeloans market in a traditionally quiet month.

Figures released today by the Council for Mortgage Lenders revealed gross lending of 26.3bn GBP in December, 25% more than the same month in 2004.

The volume of home loans taken out for purchases was boosted by the number of people remortgaging on fixed and discounted deals that have now run out.

Lending in December fell by 6% from November, following its typical path of decline towards the end of the year.

The CML said despite widespread fears of a housing market crash in 2005, annual lending totalled 287.5bn GBP, just 1% down on 2004’s record 291.2bn GBP.

CML director general Michael Coogan said: ‘The commentators who thought lending would fall sharply in 2005 based on the performance of the first half of the year were wrong. Confidence in the housing market was supported by the realisation that short term interest rates had peaked and the downward trend in fixed term rates throughout much of the year, resulting in stable house prices.

‘The second half of 2005 was characterised by strengthening housing market activity and increased mortgage lending. We expect this trend to continue into 2006 as mortgage approvals continue to rise. Against this background, house prices should remain resilient in the coming months.’

The CML represents banks, building societies and other lenders, which make up 98% of UK mortgage lending.

Story from thisismoney.co.uk

Wondering about telephone lines and ADSL connection in Spain?

One of the key questions that is asked when buying a property in Spain is “how difficult is it to get internet connection?” The answers are now availble on the internet.

Clicking on the link below will answer all your telephone and internet connection questions in English.

Telefonica, the largest independant communications supplier have created this site to help English speaking understand their services and check out the latest special offers.

Today for example ADSL Mini is now double the speed for the same price…

Unlimited free National calls in Spain when you order ADSL Mini

Telefonica are offering a cheap broadband internet connection with a speed of 1mb, 24 hours a day, 7 days a week for only 34 Euros a month.

Downloads are limited to 1GB a month, however, this is still the equivalent to 10,000 e mails, 10,000 website visits, 3,000 photos and 300 MP3 songs and adequate for light users.

If you exceed the limit, it is automatically increased to 2GB which will cost an extra 5 Euros a month, if customers exceed 2GB they will be charged 5 euros per 2GB increase, although the maximum charge for the ADSL Mini service is 42 Euros a month.

For more information on special offers and to get a full run down of their services click here


telefonicainenglish.com

BRITISH expatriates in Spain are expected to save thousands of pounds after a legal move to cut capital gains tax by the European Commission.

The Commission is to refer the Spanish Government to the Court of Justice over its taxation of non residents who sell their villas or on their personal income. If the court rules that Spain has flouted European law, as seems likely, it will be forced to reform its domestic law, reducing high tax rates for non residents.

The move would benefit thousands of British people who are not registered with the Spanish authorities as residents if they want to sell property, or those working for short periods in Spain.

The decision to take Madrid to court came after Spain had failed to change its legislation after a formal request from the Commission in July.

Under existing Spanish law, capital gains of non residents made from the sale of property held for more than one year are taxed at a rate of 35 per cent, even if they are European Union residents. Those who are official residents pay only 15 per cent.

Per Svensson, of the Foreign Property Owners’ Institute in Spain, said: “If they change the law, people will be able to charge the real rate for their villas or flats. At the moment they charge less or pay money â??in blackâ??, or undeclared cash, to evade paying capital gains tax.”

Spain also applies a flat withholding tax rate of 25 per cent on employment income for non residents. Residents pay only 15 per cent.

The Commission said that the discriminatory treatment regarding employment income was particularly unfair to those expatriates on low wages, such as Britons teaching English or working in bars during the peak summer holiday season.

A large number do not register as residents because they are put off by Spain’s daunting red tape, do not speak Spanish or do not want to be visible to the tax authorities.

A spokesman for the Commission said: “The Commission considers that the Spanish tax legislation failed to conform to the EC Treaty requirements, in particular to the non discrimination principle”.

“The higher tax burden on non residents makes it less attractive for Spain to recruit labour from member states other than from Spain and thus represents an obstacle to the free movement of workers.” The spokesman added that the tax on capital gains on the sale of property went against EU rules on the free flow of capital.

Story from timesonline.co.uk

The trend of buying cave houses in Andalucia is gaining momentum. Get Spain Almeria look at some of the more popular areas in which people are buying cave houses as well as providing some information about this type of dwelling and why it has become a cult buy.

It’s 2006 and who would have thought that a new wave of property buyers in Spain would be seeking out “caves” to purchase. Well the simple fact of the matter is that they are and that the cave houses in Andalucia are now in huge demand.

So what is a cave house?

Carved in to the hills and mountains around parts of Andalucia are communities of cave dwellers. It sounds almost as if we are talking about historical Andalucia, before the development of the coastlines and the influx of tourists, or about groups of people trying to avoid modern day life, but how wrong this would be.

These cave houses in Andalucia provide, in most cases, luxury accommodation in comfortable and unusual surroundings. In the hot summers of Andalucia they keep nice and cool, whereas in the colder winter weeks they retain the heat extremely well making them nice and cosy.

So where can you find these cave houses in Andalucia?
The majority of the cave houses are on the Almeria / Granada borders.

Cave houses are currently a more economical way to own a property in Spain as they are still quite low in cost (from about 90,000 euros). However, we are seeing these prices increase at quite a rapid pace, spurred on by their increase in popularity.

Story from prweb.com
View Cave Houses on Kyero.com

Plans to construct a further 450,000 homes along a 500 kilometer stretch of Spain’s already massively developed Mediterranean coast could be derailed by a lack of water, regional water boards have warned, indicating that the long running conflict between urban development and environmental sustainability has now come to a head.

Documents signed by the boards managing the resources of the Segura and Jucar Rivers in the southeast show that neither can guarantee water supplies to the dozens of new urbanization schemes planned in the provinces of Castellon, Valencia, Alicante, Murcia and Almeria.

“There is a growing demand for water that simply cannot be met,” the Jucar water board, which manages supplies in Castellon and Valencia, has stressed.

The schemes, which have been approved by the town councils of 50 municipalities, mostly consist of large residential complexes near the coast or golf courses geared toward foreigners and city dwelling Spaniards looking for summer holiday homes.

The new properties, which have covered large swathes of Mediterranean coastline in recent years, have already exacted an enormous toll on the environment by guzzling precious water reserves in one of the driest corners of Spain. The European Parliament this month ordered a moratorium on construction in Valencia, Castellon and Alicante, where lax zoning regulations have allowed mass conversion of rural land for residential complexes.

“Certain urbanization plans appear to have a disastrous impact on the environment and ecology of numerous coastal zones, and especially on the future condition of water supplies,” the European Parliament stated in a report.

The Valencia region “violates land use laws by reclassifying land without guaranteeing sufficient water,” Manuel Aldeguer, the head of the Segura water board, noted this week.

Though coastal development intensified sooner in Valencia, the water problems in the southeast are only likely to worsen as more residential complexes are built in neighboring Murcia and the semi desert Andalusian province of Almeria.


Story from inadaily.com

Housing markets across Europe are now expected to avoid the dramatic crashes predicted just a year ago, with most markets ending the year on a surprisingly positive note and looking forward to at least modest price growth during 2006.

Many experts had expected that Britain, where the housing market was thought to be overvalued by as much as 25 percent, would be among the first dominoes to drop in a global collapse of property prices.

But a new era of low growth in house prices has dawned here, and fears that prices would drop dramatically have largely subsided as they have in other parts of Europe.

“I don’t expect a major crash in Europe, but there will be a cooling down in many markets,” said Tobias Just, senior economist at Deutsche Bank in Frankfurt.

And price gains of just a few percent, rather than the 15 percent or more seen in the past few years, could actually reduce the chance of a more serious decline later.

“There’s a likelihood of a crash in 2007 if prices are pushed beyond justifiable levels in 2006,” Just said.

In France, for example, property prices rose 16 percent in 2004 and another 14 percent in the first half of 2005.

“This is too much of a good thing, so there might be a correction that will occur,” Just said, adding that he expected growth of only 3 percent to 5 percent in France in 2006.

The overall European market had been expected to get a lift from a long expected change in British pension rules that would allow British citizens to use self invested personal pension funds to buy residential property, even a second home abroad. The plan, which had been set to go into effect in April, included tax breaks as high as 40 percent for such purchases, leading some analysts to predict a wave of vacation home purchases around the region, and some real estate agents to gear up for crowds.

But this month the Treasury abruptly canceled the changes, citing the potential for abuse.

In Britain itself, prices that had soared by 165 percent since the mid 1990s started to flatten in 2004 and early 2005, partly because first time buyers were being priced out of the market. But now there is a recovery in the property market in Britain that is being fueled by growth in London, where the top end of the market has experienced a prolonged period of stability but slow growth. For example, the Savills estate agency has predicted 5 percent growth in 2006 in prime central London, an improvement over recent years.

“The market is really turning around in London, and agents are feeling very positive with our charts pointing northwards when it comes to top end properties,” said Jim Ward, director of residential research at Savills.

The picture is not so rosy elsewhere, with prices in northern England expected to fall by as much as 5 percent next year.

Meanwhile, the Knight Frank estate agency is even more upbeat about prime central London, predicting that prices will rise by 7 percent next year, compared with an average of 5 percent in greater London and 2.5 percent around the country.

Another major trend next year: Many once popular markets will continue to lose their luster, while areas that have been considered less desirable will gain favor among buyers eager to find a good deal in a pretty location.

For example, experts say the Costa del Sol in southern Spain has become overbuilt and incredibly crowded, especially in the summer.

“The basics of the Spanish property market are good, but people are not concentrating on the Costa del Sol area as they were 18 months ago,” said Nick Freeston, international manager at Chesterton International. In light of that declining demand, some properties are selling at lower prices than two years ago, he said.

Freeston said that Murcia, a relatively small region located in southeastern Spain on the shores of the Mediterranean Sea, is being heavily promoted as property prices there are still perceived to be cheap: A newly built two bedroom apartment is about 200,000 dollars.

“This area will experience good capital appreciation especially as it gets developed into more of a destination for tourists,” he said.

Freeston added that the top end demand in Portugal continued to be strong and was likely to remain so, making property there a safe long term bet.

According to Just of Deutsche Bank, house price growth reached 15 percent over the past year in Spain but should start to flatten in 2006, perhaps rising only 3 to 5 percent.

Full story from iht.com

The UK could be developing into a nation of property investors as a new report revealed that many young people are keen to own property abroad in the future.

According to a survey by UCB Home Loans, the specialist lender of Nationwide, there is an increasing interest among young people in the potential of buying a property abroad, as house prices in the UK show little sign of falling significantly in the months and years ahead.

Buying a property can be difficult for first time buyers in the UK at present, as house prices remain relatively high and property price inflation has begun to pick up again in recent months. However, the prospect of buying cheaply on the continent, in areas such as Spain or France, is an appealing option for many young people, as the revenues created by buying to let abroad can help finance the purchase of a home in the UK.

Over 30 per cent of young people in the UK would like to live abroad one day and see the opportunity to invest in a property while living in a foreign country as an excellent opportunity to get onto the property ladder. While many who want to live abroad would be keen on returning to these shores one day, the option of buying a property in a foreign country that they can then let out on their return to the UK means that there could be a massive increase in the number of property investors in Britain among the younger generation.

Keith Astill, managing director at UCB Home Loans, told MyFinances.co.uk: “Whilst 92 per cent of the young people interviewed want to own their own home when they are older, it is likely that some of them will never actually make it.”

However, while many may not make it onto the property ladder in the UK, by investing in overseas property there is far more opportunity for them to make a substantial income.

The study by UCB Home Loans also discovered that two in three youths in the UK expect to buy their first property between the ages of 25 and 30. Therefore, with many of these properties likely to be buy to let investments in the UK and overseas, the UK’s property investment market looks set to continue to boom over the coming years.

Buy to let investments have proved extremely popular during the property price boom, as investors have recognised the prospect of making significant gains from houses, but as the market has cooled in the UK, the opportunities in emerging countries such as Cyprus and Bulgaria have continued to grow. With more young people than ever currently looking to buy property abroad, it appears that the demand for overseas property investment will continue to increase for some time to come.

Story from Assetz news

Spain has introduced rules to prevent the historic practise of paying for large chunks of property in cash to evade tax.

Legislation shortly to come into force will mean that individuals will no longer be able to pay for a portion of properties they buy in cash, The Times reports.

The Spanish government is keen to crack down on the practise, and has introduced new tax identification numbers on all property documents in an attempt to stamp it out.

The practice will be familiar to many British people who have bought houses in the country, the paper reports. It is likely they will be affected by the crackdown, as the government seeks to claim back tax on the cash portion of their purchases.

Story from Accoutancyage.com

There appears to be irrefutable evidence that the UK property market is regaining momentum with news that house prices have now increased in six of the last seven months.

HBOS, the world’s biggest mortgage lender, has released figures showing that house prices rose by one per cent to an average of 171,632 GBP’s in December. This contributes to a 2.1 per cent increase in the fourth quarter and a 5.1 per cent increase over the year as the property market gradually turns the corner after a difficult beginning to 2005.

The majority of the improvement came after the Bank of England cut its benchmark interest rate a quarter of a point in August in an attempt to encourage growth in the economy, which was increasing at its slowest pace since 1992.

Martin Ellis, chief economist at HBOS, has also pointed to the general stability of the economy brought about by increased levels of employment in particular.

“An increase in total employment of 326,000 over the past year and August’s interest rate cut, which has helped to keep mortgage payments close to the long term average as a percentage of a new borrower’s income, have underpinned the recent improvement in house prices,” he suggested

The result has been palpable and property investors are now looking forward to a stable 2006 after fears of a market crash were shown to be far from the mark. Mr Ellis has referred to the progress in the last few months in terms of a “modest recovery”.

“This pickup in prices is entirely consistent with the improvement noted by all the main indicators of housing market activity over recent months,’ he observed.

In highlighting the seven month high in house price inflation, HBOS has added to the optimism generated by a number of other recent reports.

Nationwide has predicted that house prices will rise by as much as three per cent in 2006, while the Royal Institution of Chartered Surveyors (Rics) forecasts a four per cent rise in house prices in both of the next two years.

HBOS has been less positive by warning that the housing market is expected to be relatively “flat” this year. With a further cut in interest rates expected in the near future, many experts view HBOS’ forecast as extremely restrained although the key repurchase rate is likely to remain at 4.5 per cent on January 12th.

Nonetheless, the significant improvement already shown in the last seven months has prompted a surge of activity amongst property investors and this is likely to swell during the course of the year.

As was the intention when interest rates were cut in August, the current vigour of the housing market in the UK appears to have assisted retailers. The Confederation of British Industry recently announced that its monthly index of retail sales had climbed to the highest level for ten months.

Story from Assetz news

Property sales on the Costa del Sol have declined dramatically over the last 12 months forcing many agents to close down. Existing agents are fighting back by saying ‘No’ to registration of unrealistic house prices.

One of the main reasons for the down turn in property abroad sales on the Costa del Sol are the inflated property prices compared to other popular areas such as Costa Almeria and Costa Blanca. During the boom time on the Costa del Sol when agents listed properties they didn’t pay too much attention to the price. They confirmed what the seller wanted then added their commissions on top. Consequently many Spanish properties have remained unsold.

Finally local agents are realising the true potential of the Costa del Sol resale market.

John Stevens from Essex told www.d2rworldwide.com that he registered his property with a local agent on the Costa del Sol 18 months ago. They said the price he wanted was no problem. John was left feeling confident of a relatively quick sale but found himself still waiting 18 months later. Another local agent contacted John recently and did what so many have been afraid of in the past. They simply said in no uncertain terms that his property would not sell at its current price. He needs to reduce it! John took their advice and sold his property 4 weeks later, not for what he wanted but he still made a healthy profit.

Could this be the kick start that the Costa del Sol needs to get back in the property abroad game?

It appears that many local agents have also adopted this policy. Realising the potential of lead generation , they have started giving sound advice to sellers as apposed to sending an in experienced person to take photos and register their Spanish property.

www.d2rworldwide.com believe this is good news for both buyer and seller of property abroad on the Costa del Sol. The seller won’t be lead under a false sense of security expecting more than the property is worth and the buyer can expect a better deal.

The ball is now in the seller’s court to take advantage of the advice given or look for another agent that can blue sky them.

Story from openPR.com

MEPs adopted a report with 550 votes in favour, 45 against with 25 abstentions on the alleged abuse of the Valencian Land Law known as the LRAU and its effect on European citizens.

The Parliament invites the competent authorities to take account of the following suggestions, to remedy the problems that have arisen under the present legislation with respect to those aspects of the protection of property rights which raise questions of human and fundamental rights, and with respect to Community law on public procurement:

The inclusion in the new law of a clear definition of public interest which unambiguously prevents the possibility that the ‘public interest’ justification for expropriation, which is a precondition for any expropriation under European human and fundamental rights norms, could be used for the promotion of private, rather than public, interests,

The establishment of binding criteria for the calculation of compensation in cases of expropriation on the basis of the standards and principles recognised by the case law of the ECJ and ECHR,

Fundamental review of the bases for selecting the ‘urbanisator’, and of the procedure for awarding public contracts to the ‘urbanisator’ selected, to ensure that this office is compatible with European law, given the existence of serious doubts on this subject as evidenced by the current infringement proceedings, so as to enhance the transparency of the procedure for awarding public contracts and safeguard the property rights of European citizens,

Measures to ensure that each property owner concerned by any urbanisation plans is informed individually, effectively and in good time of any plan, and any aspect thereof, which might affect his or her property and fundamental rights, so as to guarantee an adequate possibility to consider appropriate action.

The House also calls upon the competent Valencian and Spanish authorities to ensure, through binding norms, that general plans for development and urbanisation which are likely to have significant environmental effects and which set the framework for future development consent of projects are made subject to a strategic environmental impact assessment pursuant to Directive 2001/42/EC.

The Parliament calls on the Commission to continue to exercise vigilance in terms of monitoring compliance with tendering procedures.

MEPs ask the Commission to draw on the experiences of this episode and, in view of the large number of EU citizens now buying immovable/real property in EU countries other than their own, to consider what safeguards,legislative, non legislative or merely advisory,might be appropriate so as to protect and assist citizens undertaking such important transactions and investments outside their home jurisdictions, and to report the outcome of such deliberations to the European Parliament.

Story from www.noticias.info

New figures reveal that mortgage lending in the UK increased by 1 billion GBP in November reflecting the injection of confidence that the UK property market has received in the last few months.

The report from the Bank of England indicates that after repayments, individuals borrowed a total of 9.6 billion GBP during the month. This is 700 million GBP more than the total amount borrowed in October and 800 million GBP higher than the six month average.

Encouragingly, 8.7 billion GBP of the overall borrowing figure was secured on property, which represents an increase of 10.3 per cent on the corresponding figures from November 2004.

Dismissing claims that the market was set for a crash, this was the biggest monthly increase since July 2004, with this 16 month record reaffirming the general consensus that 2006 will be a strong year for property investment in the UK.

Furthermore, the number of loans for buyers increased by 2,000 to 115,000 which is its highest level since May 2004. The value of the loans has now reached 14.6 billion GBP.

The Royal Institute of Chartered Surveyors (RICS) has said that the figures reveal a level of mortgage approvals higher than the average for the last decade. It also observed a year on year increase in approvals that has not been matched since December 1982.

RICS went on to suggest that there is no reason for the trend to discontinue in the near future, with 2006 likely to see mortgage approvals rising again.

“With interest rates likely to fall further in the next few months, we expect current firm market conditions to be maintained. As a result, mortgage approvals are likely to hit 1.33 million GBP in 2006 compared to an expected total of 1.2 million GBP for 2005, but still below the 2002 level of 1.42 million GBP,” a RICS spokesperson said.

In its November housing market survey, RICS provided further good news to property investors in the UK, with the number of would-be buyers making enquiries rising for the sixth consecutive month.

According to RICS, robust employment conditions and rising earnings have been instrumental in maintaining housing demand in spite of a cooling of the overall economic climate.

RICS’ assessment of a “cooling” in conditions seems to undersell the current situation, however, with Reuters reporting today that an index of business activity, compiled for the Chartered Institute of Purchasing & Supply and the Royal Bank of Scotland, rose to 57.9 in December from 55.8 in November.

Household demand has now been isolated by the Bank of England as the principle factor in economic expansion which it believes will accelerate throughout 2006.

Story from Assetz News

The property boom in Spain appears to be rolling on with house prices rising at around ten per cent last year.

The figures from Sociedad de Tasacion show that although this is the lowest increase for a few years, it is approximately in line with the average annual increase of 10.8 per cent since 1985.

The 10.1 per cent increase in property prices in Spain’s provincial capitals means that it now costs 2,156 Euros per square metre, following a 12.5 per cent increases in 2004 and a 15.8 per cent increase in 2003. Furthermore, real estate prices have risen by an average of 140 per cent in the past seven years, as Spain continues to dominate the attention of property investors in the UK and throughout the world.

With particularly low interest rates across Europe, the Spanish property boom has flourished in the last decade, although the increasingly competitive property markets in Cyprus and now Bulgaria have contributed to the gradual slowdown in the last couple of years.

This was exacerbated in December, when the European Central Bank raised interest rates for the first time in five years, although the figure still stands at only 2.25 per cent.

House price rises are still considerably higher than inflation, with Barcelona proving the most expensive for prospective investors.

The average price per square metre in the Catalonian capital is now 3,700 Euros, which compares to Madrid which recorded an average price of 3,629 Euros. Badajoz and Lugo were the only two provincial capitals in which prices did not exceed 1,300 Euros per square metre.

As property investors have looked to less familiar areas in search of the best returns, some of the biggest increases were found in Lleida and Valencia which both registered rises of more than 16 percent.

Indicative of the continued strength of the Spanish property market, the smallest rises were still notable, with a 6.5 and 6.8 per cent increase in Pamplona and San Sebastian respectively.

The study from Sociedad de Tasacion predicted that prices will continue to rise in 2006, although the rate of increase will be less spectacular than it has been in recent years.

As in the UK, many had predicted that the growth was unsustainable and that the bubble would necessarily burst, but the twelfth increase in 12 years and only a minimal slowdown from last year continues to defy the doubters.

Figures show that there were 800,000 new home starts last year in Spain, which is more than the combined totals of Britain, Germany, and France. This has merely been fuelled by the increased popularity of second homes, with rising incomes and falling travel costs making holiday homes an increasingly viable option.

Story from Assetz News

The free property price guides from Kyero have just been updated with the latest figures. You can download them for free here. We’ve also added four new guides for Barcelona, Castellon, Huelva and Jaen provinces.

The actual property numbers on these four guides are quite low so the figures are not as representative of a true ‘average’ as we would like. They are, however, better than nothing and the ‘big picture’ they present is, we believe, accurate.

Compare, for example, the average property price in Barcelona (585,000 Euros) to that in Jaen (69,000 Euros) and you’ll immediately begin to see the value of these price guides. It probably won’t surprise you to learn that it will cost substantially more to live in Barcelona than Jaen. However, the news that it’s about 8.5 times MORE expensive is a little more concrete and useful.

There are now 18 detailed price guides available so that you can find average property prices by individual towns within a province too. Don’t forget, this information is also summarised on the right-hand-side of every property page on Kyero.com.

For 2006, we hope to be adding property and plot size details and calculating average prices based on price per square metre. This will allow us to present you with average prices that conform more closely with the ‘official’ methods of valuing property in Spain.

Until then, you can download the summary and detailed price guides for free right here