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Boosts for property investors in Spain

2nd December 2005 | back to article listings BACK    print this article PRINT

Four days after a similar move by Abbey, the Banco Halifax Hispania has launched its own fixed rate range of mortgage products for UK residents seeking to invest in property in Spain.

The company offers five separate mortgages which range in fixed rates of periods between one and five years. Speaking to moneynews.co.uk, Ian Smith, head of European operations for Halifax, said: "These very attractive fixed rates will be ideal for those who prefer to have certainty of repayment costs during the early years of the mortgage."

In what is an exciting period for property investment in Spain, it has also been announced that prices of retail sales in the country have increased by 16.6 per cent in the first three quarters of 2005. According to propertyinspain.co.uk, a survey by the Spanish Real Estate Association has revealed that the average price of a second hand house per square metre is now €1,772.

The survey also highlighted the fact that equity growth has fallen three per cent, which will result in cheaper ownership and favourable equity growth. These conditions make the Spanish market particularly attractive for prospective investors in the coming weeks and months.

The news is balanced, however, by the report by Tribune Properties which predicted that house prices in Spain could fall by around ten per cent in 2006 because of reduced demand and the effects of heavy building.

Continued interest in the Spanish market from British property investors is matched by interest from within the country, with the International Herald Tribune reporting that the significant cuts in interest rates over the last five years have fuelled residential construction, buying and selling, and mortgages.

The newspaper reports that Juan Fernández-Aceytuno, managing director of Genworth Financial, said: "What has not varied is Spaniards' yearning to be homeowners. When they buy a home they think they're making an investment and the price will never drop. So before it is paid for, they are already thinking about buying a second home."

Spain is also benefiting from the fact that Britons are now spending record amounts on investing in foreign properties. The Family Spending Report from the Office of National Statistics (ONS) has recently revealed that Britons are spending as much as £6 billion per year on second homes abroad.

The Spanish market has been a major beneficiary of this, with many people looking to put their money into a second home in the sun. as the new rules on Sipps come into force next April, the Spanish property market can expect to see further investment from UK property investors.

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