On Monday the Bank of Spain said property loans would be moved into the bad bank at an average discount of 45.6 per cent in the hope of attracting investors. The figure would be 63.1 per cent for foreclosed assets and 79.5 per cent for empty land.
Madrid hopes private investors will own at least 55 per cent of SAREB, which was created as a condition of the European aid for the banks and is due to start operating by the end of November. About two-thirds of the assets transferred in an initial wave of 44 billion euros will be loans and the rest foreclosed properties.
“A large majority will be bad loans and a discount closer to the foreclosed asset price would have been more realistic. I wouldn’t expect more than 20 per cent of the loans to survive.” Continue reading →
The RICS Global Real Estate analysis released mid-November was rather sombre in its outlook on Spain. With Spain at the heart of the present Euro crisis it could hardly be otherwise, but in quoting official statistics on mortgage lending, property values and economic growth, the report indicates that on a national level home purchases, property values and GDP growth has all slumped again, spelling out a difficult year ahead.
In general regarding Spain as a whole, I agree with what has been said,” says Campbell D. Ferguson of Survey Spain. “The level of debt in the economy, both institutional and personal, is huge and it will take many years for that to be removed. Effectively, the years of boom were based not so much on increasing productivity and wealth, but largely on borrowing from the future. The future has now arrived and the debts have to be paid.” Continue reading →
Sometimes the easiest way to explain the exact function of a Chartered Surveyor is to describe the variety of surveys on which their expertise is considered vital. As you will be able to see, their knowledge can be requested by a number of different parties, depending on the situation.
The following four categories will typically occupy the majority of the surveyor’s working week.
These are carried out on behalf of a bank or other mortgage lender. These surveys, though paid for by the borrower, are really for the benefit of the lender, since they are undertaken to ensure that the lender’s money is safe. A mortgage survey in Spain, unless it is carried out on behalf of a UK or Gibraltarian bank, has to be carried out by a tasador acting on behalf of one of the Sociedades de Tasación approved by the Bank of Spain. These companies have to place a substantial ‘bond’ with the Central Bank, which would appear to be a kind of indemnity fund where lenders can be compensated in case of gross error by the tasadores. This central control can lead to the Sociedades being used to influence the market, such as the recent example where they appeared to have received instructions to undervalue in an attempt to reduce mortgage lending and slow the rise in values. So their valuations deliberately may not accurately reflect the price that the property could command on the market. Continue reading →