Tag: pound

Taylor Wimpey Invests €95M in Costa del Sol to Meet Demand from Brits

14 June 2018 – Eje Prime

Taylor Wimpey España is going to invest €95 million in seven of the developments that it has up for sale on the Costa del Sol. The property developer is strengthening its commitment to the Malagan coast after verifying that Brits, one of its main client cohorts, have doubled their investment in housing in Spain.

“Demand is increasing in general”, explained the Director of Sales and Marketing at  Taylor Wimpey España, Marc Pritchard. The executive also added that “although the Brexit effect caused Brits to buy less in 2017, the fear is disappearing”.

Another important factor in the evolution of house purchases by Brits is the devaluation of the pound, which last year made investment in Spanish housing more expensive for buyers from the islands.

Nevertheless, Spain is still the preferred destination for Brits looking to buy a home, something that is reiterated by the British Embassy in the country. Across the whole of Spain, there are around 300,000 British citizens and “they are still the main overseas buyers of homes, accounting for 15% of the total”, says Pritchard.

In the ranking of foreign nationalities who buy homes in Spain, the Brits exceed the French, who account for 8.64% of the total; the Germans, with 7.77%; the Belgians, with 6.39%; and the Swedes, who continue as a historical investor, accounting for 6.38% of the total.

Original story: Eje Prime

Translation: Carmel Drake

Wimpey Protects Its Homes In Spain From Brexit

28 July 2016 – Expansión

The British real estate company has refinanced its property developments on the coast through the issue of bonds amounting to €100 million.

One of the consequences of the UK referendum, held on 23 June in which Britons voted in favour of Brexit (to exit the European Union), may be a decrease in the volume of house purchases on the Spanish coast by citizens of the United Kingdom, as a result of the depreciation in the pound against the euro and fears about future restrictions over the free movement of people between the two countries.

Taylor Wimpey, the real estate company that has property developments in Andalucía, Alicante and the Baleric Islands, aimed mainly at British buyers, has decided to protect itself against those risks through a debt issue in euros to “hedge its investments in Spain”.

On 28 June, just five days after the referendum, the company completed a private placement of bonds amounting to €100 million with institutional investors, secured by its Spanish assets. The securities pay annual interest of 2.02% and are due to mature in June 2023.

According to market sources, this operation seeks to refinance in euros Taylor Wimpey’s debt associated with its assets in Spain, which amount to €168 million. By having the assets and debt of its Spanish subsidiary denominated in the same currency, the group’s balance sheet is more stable in the face of possible fluctuations in exchange rates in the future.

Currently, Taylor Wimpey has several property developments underway along the Spanish coast, where it has already committed to sell 399 homes.

During the first half of 2016, the firm completed the sale of 53 homes in Spain, at an average price of €342,000. Interestingly, one of these property buyers was Pete Redfern, the CEO of Taylor Wimpey. The chief executive of the group acquired two houses from the Spanish subsidiary, one for €278,000 and the other for €350,250. According to the company, the first home was sold at market price, whilst the other was purchased by Redfern taking advantage of the discount plan offered to employees “under the same terms offered to all other staff”.

Taylor Wimpey’s revenue in Spain between January and June amounted to GBP 14.8 million (€17.6 million), generating an operating profit of GBP 0.3 million. “We hope to continue making progress in the Spanish market during the rest of the year, given the strength of our order book” said the group. “Looking further ahead, we remain cautiously optimistic, given the potential implications of the macroeconomic environment in Europe”.

The company, which besides its business on the Spanish coast, is heavily focused on the United Kingdom, recorded revenues of GBP 1,457 million during H1 2016, up by 9.1%. At the results presentation yesterday, Redfern said that Brexit had not yet affected the group’s sales in the British market.

Original story: Expansión (by Roberto Casado)

Translation: Carmel Drake

Brexit May Shatter British Dream Of A Home In Spanish Sun

6 July 2016 – Bloomberg

Londoner Joanne Connor may sell her holiday home in southern Spain as a falling currency drives up the cost in pounds of her household bills and mortgage payments following the U.K.’s decision to leave the European Union.

“The cost of living in Spain has shot up for us overnight,” the 39-year-old mother of two from London said in a phone interview. “If the pound stays this low or continues to drop, we will end up having to sell.”

Sales in some coastal areas of Spain could tumble by as much as 20% in the next 18 months as a sliding pound erodes the spending power of British buyers and owners following the vote to leave the EU, according to Aura Real Estate Experts, an independent advisory firm focused on Spanish property. Britons make up the largest contingent of overseas home buyers in Spain.

Connor has to change pounds into euros to meet the 400 euros ($445) a month mortgage payments on the two-bedroom home. The 9 percent decline in the pound’s value against the euro since the Brexit vote will limit her visits to Spain to just one this year, compared with six times in previous years.

“It’s not just the mortgage which is now more expensive; it’s the car hire, the utility bills, food,” Connor said.

Foreign and domestic home buying in Spain evaporated when the economy collapsed during the financial crisis, leading to an international bailout of its banks and the worst recession in the country’s democratic history. While overseas buyers have begun to return to the market, prices are still well below their pre-crisis peak.

Connor purchased her Spanish property in 2005 for 120,000 euros and says it may now be worth 75,000 euros, based on the price for which similar properties are selling in the Mazarron Country Club in the southern region of Murcia, where her holiday home is located.

U.K. citizens represented 21% of the 46,090 purchases made by overseas buyers last year, data from Spain’s College of Property Registrars show. Foreign buyers made up 13% of all Spanish house purchases in 2015. In Murcia and Andalusia, Britons account for 54% and 29% of transactions by foreigners respectively, according to the study by Aura Real Estate Experts.

Purchases on hold

“We had 10 would-be buyers and two have put their plans on hold after Brexit,” said Mary Arro, partner at Mia Property Boutique in Alicante, which specializes in real estate deals along the Spanish Costa Blanca. “The concern is sterling — they want to know where the pound goes next.”

In the municipalities of Benitachell in Alicante and Benahavis in Malaga, sales could drop by around 20% and prices decline by around 9% in the next year-and-a-half as Britons sell or up or shun future purchases, according to Aura Real Estate Experts. The firm also identified 15 other towns in Alicante and Almeria where sales are expected to fall as much as 17% over the same period.

Spain attracted the largest number of British tourists in Europe, with 16 million people arriving in 2015, according to data from Euromonitor. In the five months through May, they spent almost 5 billion euros in Spain, 14% more than a year earlier, the Spanish statistics office said on Tuesday. Britons accounted for about a fifth of all spending by foreign tourists.

Dario Fernandez Palacios, an agent a Marbella-based real estate broker Prime Invest, said home sales to British buyers had already slowed “noticeably” in the months leading up to the U.K. referendum on June 23. “Now they are totally paralyzed,” he said by phone.

“The coming months, and probably years, are expected to be marred by uncertainty in and outside the U.K.,” said Wouter Geerts, a travel analyst at Euromonitor International.

Original story: Bloomberg (by Sharon R. Smyth and María Tadeo)

Edited by: Carmel Drake

Brexit Will Hit Spain’s Coastal Housing Market

27 June 2016 – El Mundo

The tremors of the international earthquake caused by Brexit, i.e. the victory of the “Yes” campaign in the United Kingdom’s referendum to leave the European Union (EU), will also be felt in the Spanish housing market. Especially in coastal areas, which are so dependent on British demand. The effects are yet to be measured, but all signs are that the UK Goodbye will overshadow the domestic property sector, at least in the short term.

Until now, the consequences of the possible Brexit, now a harsh reality, had been limited to a slowdown in the number of transactions and the signing of SPA contracts with annulment clauses to be invoked in the event that the United Kingdom left the EU, according to Santiago Sánchez, managing Partner at Engel & Völkers (E&V) in Torrevieja and Orihuela. (…).

“In addition, the new international environment may cause Brits to sell the homes that they already own in exchange for euros. And as we know: more supply and the same or less demand, decreases prices”, warns Sánchez, who acknowledges that the market had assumed the opposite outcome from the vote. “We were expecting a boost in activity following a “No” Brexit vote and for all of the built-up demand to be able to go ahead and make purchases, however…”, he laments.

For Sánchez, nevertheless, the problem that will penalise the housing market the most will be the bureaucractic aspects. “If the United Kingdom leaves the EU, it will become much harder for British citizens to settle down in Spain. They will have to request residence and work permits, take out private health insurance, and they don’t know what will happen in terms of inheritance and gifts, etc”, he said. In any case, the head of E&V believes that Brits will continue to weigh up the appeal of living in Spain. “I think that they will keep buying homes because they want to retire here”, he said.

On the other hand, most economists and real estate experts consulted agree that Brexit is bad news for the recovery of the (housing) sector in Spain, which had been started to gain strength, including along the coast. And it is precisely in the coastal regions where the United Kingdom’s departure from the EU will cause the most negative effects, given that Brits account for 21.3% of house purchases by foreigners, and the vast majority of those purchases are made by the sea. The experts are certain that the devaluation of the pound and the on-going uncertainty will weigh down on this buoyant purchasing activity, both at home and overseas. (…).

Meanwhile, Gonzalo Bernardos, Economist and Director of the Real Estate Masters at the University of Barcelona, is much more positive than his colleagues, and offers a Brexit analysis with a broader outlook. “In light of this emergency situation and to avoid a catastrophe on the markets, I think that the European Central Bank (ECB) will inject a lot of liquidity into the market, which means the banks will have more credit and that will drive the Spanish economy and, therefore, the housing market”, he said. “The current neoliberal EU will be completely redesigned and there will be a major reorganisation of the union to prevent any other country from leaving. We will say goodbye to the strict deficit demands for individual countries. In the case of Spain, the fine that was going to be levied on us, will become worthless”, he said. (…).

Original story: El Mundo (by Jorge Salido Cobo)

Translation: Carmel Drake