The Sevilla City Council, through Emvisesa, Formalized the Purchase of 18 Empty, Private Houses for Social Uses at the Cost of More than One Million Euros

29 August 2018

The Municipal Housing Company of Sevilla, Emvisesa, concluded a purchase agreement for the acquisition of 18 of the homes it had been offered through its First Program for Acquisition of Empty Houses, at a total investment of 1,043,684 euros, plus adaptation works expected to cost 100,000 euros and the corresponding expenses and taxes.

“This is the fulfilment of another of this government’s commitments by which we received a good response in our quest to incorporate new flats to the housing stock to cover the social needs of the population of Sevilla, given that the existing municipal public housing is already completely occupied,” the delegate for Social Welfare and Employment, Juan Manuel Flores, explained.

After awarding more than 600 homes during the present municipal mandate, Emvisesa has allocated the totality of its housing stock. The result is a strategy of urgent expansion of the public housing stock and the new Sevilla Municipal Housing Plan (PMVS), establishing disparate intervention initiatives in the housing sector to favour access to housing by citizens and respond to different types of the population’s needs, among which is the acquisition of empty homes.

These 18 homes, located in different neighbourhoods of the city, are now added to the 63 obtained through the Ramón Carande land exchange project that have already been delivered to the City Council, as well as those achieved through the rental acquisition program and the agreements signed with banking entities. The objective is included in the Municipal Housing and Land Plan, which established financing of more than 11 million euros for the different acquisition programs by Emvisesa, the Urban Planning Management, Municipal Assets, in addition to external financing. The objective established in the PMVS, consisting of the capture of between 15 and 50 homes per year between 2018 and 2023, will be largely exceeded in 2018, as 81 empty homes have already been acquired.

Emvisesa is already finalising a new campaign to capture vacant homes that will be permanently open, in a similar way to how the Empty Housing Uptake Program (Rental) works. The operation was already approved at the last Municipal Plenary, and the bases for its approval are being finalised in the coming weeks.

These measures will allow the immediate expansion of the municipal stock of housing alongside others planned in the PMVS, such as the development of more than more than 1,000 protected homes through new construction and rehabilitation.

Original Story: Emvisesa

Translation: Richard Turner


Ministry Of Development: 22.2% Of Spaniards Rent Their Home

6 July 2017 – Eje Prime

“We are seeing a change in terms of the mentality of Spanish society with respect to the use of homes”, said the Secretary of State for Infrastructure, Transport and Housing, Julio Gómez-Pomar. And that manifests itself in the form of a higher percentage of people living in rental homes: up to 22.2% of Spaniards now live as tenants (rather than owners), up by 5.2% compared to 2012.

That was one of the findings to emerge from the Congress of Deputies’ Commission for Development, when it unveiled the general outlines of the new State Housing Plan 2018-2021, which the Government wants to enter into force on 1 January 2018.

In terms of the rental market, Gómez-Pomar evaluated the impact of the new Urban Letting Act (LAU), approved by the Ministry of Development in 2013. “The LAU is accompanying this change in mentality”, he said.

On the other hand, he rejected the possible approval of measures that would oblige the owners of vacant homes to rent out their properties because “beyond the ideological controversy”, according to the number two at the Ministry of Development “there is a legal limitation, since the constitutional order establishes guarantees with respect to properties, their purpose and the use of them”.

To that end, he defended that “it is better to establish stimulus, incentive and security measures for the rental market to ensure that anyone who puts their home up for rent is not abused and decides not to invest their savings in buying a home again”.

Original story: Eje Prime

Translation: Carmel Drake

Valencia’s Gov’t Incentivises Homeowners To Rent Out Vacant Properties

16 March 2017 – Cadena Ser

The Valencian Generalitat will pay insurance to families and other people who let out the vacant homes they own. The measure forms part of the new Law for the Social Role of Housing, which entered into force at the beginning of this month. In addition, the regional government is also planning to impose sanctions on banks that do not offer up the vacant homes that they own for social housing purposes.

The Councillor for Housing, María José Salvador, visited Castellón yesterday, where she explained the main aspects of the new Housing Law in the Community of Valencia. Salvador highlighted that the Law’s objective is to incentivise the rental of properties owned by individuals that are not currently occupied.

To this end, the regional government will pay insurance to protect homeowners in the event that tenants fail to pay their rent or damage properties. On the other hand, the Councillor for Housing said that the new law provides for the imposition of sanctions on banks that do not hand over their vacant homes. Salvador said that the banks should report the homes they have vacant to avoid conflicts and possible fines. Unlike individual owners, the banks will not be covered by any insurance policies paid for by the government.

Even though the Law for the Social Role of Housing only entered into force two weeks ago, the Council has already opened several meeting points, both physical and digital, where interested parties can obtain more information about the initiative.

Original story: Cadena Ser

Translation: Carmel Drake

Fitch: Banks Selling Foreclosed Homes With Discounts Of 67%

14 October 2015 – Expansión

Banks are now selling homes with an average discount of 67% of the value they had before they were foreclosed. This data, which relates to the first half of the year, represents a historical record, according to a report that Fitch will publish today, to which Expansión has had access.

“The depreciation of properties sold after they have been foreclosed is high, at around 67% of the initial valuation”, says the credit ratings agency.

Given this reality, Fitch believes that the recovery of the residential sector has not yet affected the market for houses sold by banks, and that “it is unlikely that it will benefit” from this improvement in the real estate market “in the short or medium term”, according to the report, prepared by its analysts Juan David García, Christian Gómez and Beatriz Gómez.

“Unsellable” homes

Fitch emphasises that there is still an enormous stock of “empty and unsellable” homes, above all “in areas that are expected to suffer from the structural imbalances in the Spanish economy for longer”.

“Given their poor locations and conditions, a considerable number of new homes have little hope of securing a buyer”, says the agency, which increases its estimate of the number of unsellable new homes to around “150,000”. That figure represents a quarter of the 600,000 unsold new residential properties in Spain.

Not surprisingly, the agency notes that the recovery in the housing market is happening “at two speeds”, in such a way that the trend will vary. “Whilst the properties in prime locations in city centres will enjoy a gradual recovery – influenced by the improvement in the economic environment and the recovery in credit –, those “problem” properties linked to mortgage foreclosure procedures and those located in peripheral areas with low levels of economic activity, will continue to see price adjustments and high losses” on their valuations.

Political risks

Fitch’s report also warns about the possible negative effect that the new legislation (against vacant homes owned by banks) may have on the value of those properties. Moreover, the associated (political) risk is on the increase”. The analysts cite the case of Cataluña by way of example, where the Generalitat has introduced a new annual fee for homes that have been unoccupied for more than two years without adequate justification.

On the other hand, the agency believes that this will result in “aggressive mortgage foreclosure strategies by creditors looking to get rid of problematic real estate assets from their balance sheets”. And that will also affect the banks, of course.

Finally, Fitch addresses the rising trend in mortgage lending, something that “is driving prices up”. “Mortgage lending is growing at an annualised rate of 20%”, says Fitch, whose analysts think that this increase will continue over the coming months.

The agency expects competition to intensify between lenders, but under no circumstances does it foresee a return to the figures recorded during the real estate boom.

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

Election Fallout: Large Investors Rethink Their Strategies For Spain

2 June 2015 – Expansión

Election fallout / International funds are worried about the impact that the new (political) environment will have on their purchases of: social housing, problem mortgages and portfolios of homes from banks.

The rise of Podemos in the municipal and regional elections could clog the bank’s real estate drain once again. After years of provisions and foreclosures, the financial sector had started to sign large transactions in recent months, and whereby reduce the high burden of property on their balance sheets. Transactions worth more than €10,000 million are currently underway. However, some potential investors have begun to rethink their strategies and fully expecting that the projects that are already underway will be affected, at least in terms of price.


The fears of the larger international funds revolve around what might happen in three specific segments: subsidised social housing (VPO homes), where Blackstone and Goldman Sachs have been very active; the suspension of evictions; and the possibility that new measures will be taken to deal with vacant homes.

Subsidised social housing

Subsidised homes were one of the assets that the funds that first arrived in Spain expressed interest in. Blackstone and Goldman purchased more than 8,000 homes of this kind between 2013 and 2014 from the Community of Madrid, the Town Hall of Madrid, FCC, Sareb and Bankia.

Now, after a couple of years managing these real estate portfolios, the funds fear that the expected arrival of Ahora Madrid in the Town Hall will change the rules of the game and may even cause them to reverse their purchases (i.e. exit their investments) (…).

Mortgage portfolios

The second wave of concerns relates to mortgage portfolios, which were expected to generate a large volume of transactions during 2015. A priori, financial sources indicate that it would be easier if there was no legislative change until the general elections, in case Podemos gains strength as an alternative Government. However, the mere uncertainty in this regard means that funds are going to really take care with the purchase of any portfolio.

Blackstone is again the fund that is most exposed to these assets, since in 2014 it purchased a portfolio of problem mortgages from Catalunya Banc amounting to €6,400 million. This acquisition involved around 50,000 mortgage contracts, of which 57% were overdue or non-performing; and more than half were located in the province of Barcelona, where the possible arrival of BComú – which groups together Podemos, Esquerra Unida and other left-wing parties – generates real real amongst international investors.

Following this transaction, agreed in 2014, Bankia and BMN have put their own problem mortgage portfolios up for sale.

Sources close to the funds explain that eviction is the last resort used for this type of portfolio, and that the main objective is to reduce the debt so that loans become more affordable or “daciones en pago” in exchange for holding onto the home. But, they add, that the legal concept of eviction helps them to put pressure on certain delinquent borrowers, something they would have to stop doing based on the election promises of some of the political parties.

Tax on vacant homes

Given the uncertainty surrounding the general elections, a more immediate fear is the new taxes that local councils in the major regional capital cities may introduce: such as the tax on vacant homes. That would certainly have an effect of some of the loan portfolios that the banks have put on the market in recent months. (…)

Original story: Expansión (by J. Zuloaga)

Translation: Carmel Drake

Cataluña: Banks Have 3 Months To Confirm Stock Of Vacant Homes

25 March 2015 – El País

Financial institutions, investment funds and the bad bank – Sareb – will have three months to inform the Generalitat about the number of empty homes they have on their books as a result of foreclosures or the assignment of deeds in lieu of payment (“daciones en pago”). Using this information, the Catalan Government will be able to impose a tax on vacant homes (the corresponding bill is currently with the Parliament) and undertake the necessary actions to establish their condition and demand their refurbishment. The decree that creates the register, approved yesterday by the Consell Executiu, also includes a pre-emptive purchase option by the Public Administrations of the homes whose residents are at risk of being evicted.

The Ministry for Housing, led by Carles Sala, wants to increase its stock of social homes in areas with highest demand. The urgent measure decree law to mobilise homes resulting from mortgage foreclosures establishes that the Public Administrations may exercise “their pre-emptive rights and rights of first refusal” – i.e. to a preferential purchase – when a company, financial institution, investment fund or Sareb is going to sell a home for which a mortgage foreclosure procedure is pending in any one of the 72 municipalities with greatest demand for housing. The text will come into force when the Official Document from the Generalitat of Cataluña (Documento Oficial de la Generalitat de Cataluña or DOGC) is published, which is expected to happen this week.

Sources from the Catalan Executive explain that they estimate that the banks have between 10,000 and 20,000 vacant homes on their books in areas with highest demand. This figure, which currently ranges quite a lot, should be confirmed by the register, which all owners of empty homes in Catalaña will have to sign up to. The occupants of the homes that will be handed over to the Public Administrations – which may in turn assign them to entities in the third sector (of social economy), per the request of those entities – will have to pay a social rent amounting to €212 per month on average.

The Department for Planning and Housing, led by Santi Vila (pictured above), is already exploring the market and may announce its first transactions next week. For the time being, the Catalan Housing Agency has €8 million to make purchases, although its final budget will depend on the amount collected through the tax that it will apply to the banks’ empty homes, which may range between €8 million and €26 million. Sources from the department explain that they are not looking to purchase homes for €100,000. The majority of the homes that have eviction orders pending are located in suburban neighbourhoods, and as such they are modest flats whose market prices may be as low as €20,000 or €40,000.

The Generalitat has also found that many of the homes in the stock that have been vacated due to evictions are falling into disrepair. For this reason, the decree obliges the entities that own such properties to carry out the necessary renovation work. If they do not, there are two options. The first involves a serious fine. The Housing Law establishes fines of up to €90,000, although the Catalan Government is in favour of ensuring that the amount of these fines is commensurate with the cost of the works that need to be performed. If the financial entity that owns the home does not carry out the renovation work, the Generalitat may conduct an “enforcement”, involving the expropriation of the use of the home for a period of between four and 10 years.

In the end, the department will try to avoid any double evictions through an aid package that will be collected in April. In this case, the objective is to prevent families that have lost their homes, but that have benefitted from the assignment of deeds in lieu of payment or social (discounted) rent by the financial entity, from having to face additional procedures if they cannot afford the rent.

Original story: El País (by Lluís Pellicer)

Translation: Carmel Drake