Blakemore Walker Chartered Surveyors & Legal Consultants

SPECIALISING IN PROPERTY PURCHASE AND SALES IN ASTURIAS, CANTABRIA & GALICIA

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FEBRUARY 2012

The pound remains fairly steady against the euro and has not dropped below 1.19 since our last comment. There is debate as to whether the euro will get weaker. The technicians are saying that the massive continued intervention by the ECB and the possibility of lower interest rates should assert downward pressure on the euro. There is still a lot to play out in europe but there is a hint that buyers are returning to the Spanish property market as a europe break up seems less likely.

DECEMBER 2011

Three days until Christmas and the pound is over the 1.20 level against the euro. This level reflects the uncertainties in the financial markets as to whether the euro can survive 2012. Recent massive liquidity in the form of half a trillion euros has been pumped into the euro banking system and over 500 banks have taken up the cheap three year money offered by the ECB. The immediate threat of a credit crisis has probably been avoided but the first half of 2012 will be crucial as the eurozone requires to re-finance a substantial amount of debt.

NOVEMBER 2011

There has been a dip in the pound against the euro down to below 1.14 but since the Greek government's announcement that there should be a referendum, there has been a spike up to over 1.15 versus the euro. The UK is still regarded as a safe haven, and the way matters are progressing in Europe, the pound could strengthen further. The technicians would say that the pound could start to move significantly if it breaks through the 1.22 -24 barrier -we shall see.

SEPTEMBER 2011

The pound versus the euro stays within a reasonably narrow band. On the upside there is talk that the UK is regarded as a safe haven, but at the same time the pound is under pressure due to internal economic reasons. Buyers in the northern Spanish market remain timid and it will remain to be seen whether the reduced purchase tax on new property will provide a boost to the failing spanish property market.

JUNE 2011

Asking prices are becoming more realistic and it is now widely accepted that property valuations have declined by up to approximately 50% and perhaps more in some areas. There are still some crazy asking prices for some properties but these silly prices often reflect a system where property websites are either not updated or the vendors are simply testing the market in the true Spanish tradition.

The relatively weak pound is still holding back a lot of purchaser activity but the reality is that the current exchange rate level is probably reflecting the true status of the UK economy which we are all becoming used to. The problems in Greece with impending debt restructuring, could put renewed pressure on the Euro but this "show" has a long way to go before final curtain.

APRIL 2011

The amount of property on the market is increasing and the buyers are beginning to trickle back. The recent weakness of the pound against the euro has perhaps put many buyers in the mood to wait a little longer before taking the plunge but one thing is for certain and that is that the market is adjusting to the new conditions. What adjustments you may ask? One of the obvious characteristics is the willingness of vendors to negotiate as the requirement to sell increases. The natural adjustment of the market is actually taking place and the current state of the property market in northern Spain is easy to explain- less agents, more property, better prices.

Let's see what the summer brings!

JANUARY 2011

What will the new year bring to the Spanish property market?

Concerns about the state of the Spanish property market will not disappear with the new year. The banks are holding increasing amounts of "distressed" property and the world markets recognise that the actual value of this property is largely unknown. The fear that the banks could be in a worse position than is being admitted is providing uncertainty. There are massive amounts of surplus property in some sectors, with the main focus on the mediterranean and southern costas. In the north the scenario is different where price rises and falls have been less pronounced. A recent report states that official figures indicate that the price of second hand property is now rising slightly in Asturias - these figures should be treated with scepticism but as long as the proper advice is taken, there is no doubt that northern Spain is looking more attractive by the day.

It is easy to see that there are plenty of tempting price reductions but as ever, buyer beware!

NOVEMBER 2010

Is the euro in crisis? Recent strengthening in the pound hitting 1.18 for the first time in a couple of weeks, has been due to the world markets showing concern over some of the eurozone countries, such as Ireland and Greece. Now the markets are focusing on Spain and Portugal. Spain's government bond prices are reducing, and the higher yields will force Spain's borrowing costs to greatly increase. If the IMF have to step in, as they have done in Ireland, then Spain's real economic situation will be exposed. One important area where current official figures provide false information is in the housing market. For example, one region in the north of Spain is showing a 9% reduction in property values since the height of the market in Spring 2008. In Andalucia the figure is a 13% reduction. The actual figures throughout Spain are far worse than this! FAR WORSE.

OCTOBER 2010

Slight weakening in the pound against the euro has been experienced in the last few weeks. The current global "currency war" is not helping the pound which has historically been economically linked to the dollar which is weakening against a basket of currencies. The pound is approximately in a band between 1.13 and 1.16.

The pound is about 20% below its highs of 1.45 versus the euro available for many years. The property market is by comparison between 30% and 40% below its highs. A popoular price range over past years for purchasers buying property in northern Spain has been 70,000 and 130,000 euros. However, relatively more transactions are now taking place below that psychological level of 100,000 euros.

SEPTEMBER 2010

The value of the pound against the euro remains in a fairly narrow band and the 12 month trend is definitely upwards via a steady curve. Buyers are still tentatively coming back to the market but the gold rush has not yet started. There are certainly more and more decently priced properties available and values per sq.m. are now at what I consider to be low levels. Please see Blakemore's Blog

Clive Robbins Managing Director, Blakemore Walker

AUGUST 2010

There seems to be some stabilisation in the current exchange rate between the euro and the pound at a level around 1.18 to 1.21. It is certain that this stability is bringing some UK purchasers back to the market, but only time will tell.

Clive Robbins Managing Director, Blakemore Walker

BBC EXCANGE RATES business page

MAY 2010

The pound against the euro has become more volatile within recent weeks following the crisis in the euro zone and the outcome of a hung parliament in the UK. It is currently difficult to predict which way the pound is headed from here, but I suspect that until a government is formed and the euro crisis is resolved there will continue to be volatility. Purchasers should be careful to ensure that they understand the financial implications of any potential future exchange rate fluctuations.

Clive Robbins Managing Director, Blakemore Walker

FEB 2010

The strength of the pound against the euro has settled down to a rate running between 1.10 and 1.15 since last October. It is currently difficult to predict which way the pound is headed from here, but I suspect that until the general election is passed, there will be little fluctuation beyond the current range. Over recent months prices have ticked significantly lower in the Spanish property market and activity levels are still low. Valuations are now being carried out at 30% to 40% less compared with the top of the market back in 2007. The realisation by property owners that selling prices have to be adjusted in order to secure a sale has meant that increasingly there are more and more reasonably priced properties being offered.

Clive Robbins Managing Director, Blakemore Walker