Easier to buy bargain property in Spain

While mortgages is the UK are still hard to find, buyers of property in Spain have had it much easier to fund their purchase in the sun, with some recent sales going through on 80% loan to value deals.

The difference can be put down to McBroon himself, both as chancellor of the exchequer and, latterly as prime minister. His was the “light touch” on the banking tiller that allowed the Mad Men to take on toxic assets and venture into hitherto uncharted banking waters. This brought about the taxpayer emergency funding to keep the banks in business and much face saving for the McBroons.

There’s been none of this in Spain, where a single authority, the Bank of Spain regulates with an iron fist, laying down strong lending rules and no venturing into fringe activities. Result, just a single bank bailout of a minor caja in Castilla La Mancha.

As in the UK, the resultant recession has brought about many repossessions, with an estimate 74,000 properties being taken back by the Spanish banks (about 4.7% of total assets). Recent estimates put the value of property repossessed and unsold developer stock being swapped for debt by Spanish banks at about €16bn (£14bn).

Despite that, the Bank of Spain, in a further boost of confidence in the Spanish property market, has relaxed provisioning rules for lenders in a move that could help some banks avoid losses next year and allow others to strengthen their capital ratios.

The Bank of Spain told all banks that they would no longer have to set aside the full value of high-risk mortgage loans - those for more than 80 per cent of a property's value - after two years of arrears.

Instead, they would only have to provision for the difference between the value of the loan and that of 70 per cent of the mortgaged property. In the case of a mortgage for the total cost of a new home, for example, banks would provision for 30 per cent of the property's value.

The central bank also warned banks to "update" their Spanish property valuations, which means the current sales of repossessions will keep prices down for bargain hunting Brits and other north Europeans for about another year.

Banks and their specialist brokers are offering new or newly homes priced at 15% to 50% below current realistic valuations and registering buyers from across Europe and North America on a daily basis. Sometimes there are five bargain hunters chasing the same property – not surprising with such discounts and generous mortgages built-in.

USA leadership and UK credibility

The contrast between the Obamas running the USA and the McBroons running the UK was evident to citizens of both countries today when one leader came clean about the recession and produced a credible progress report while the other played dirty politics and refused to come clean when caught in the act…

The head of the McBroon clan “regretted” the poisoned emails his caber-tossing henchman sent off to a New Labour website propagandist, but apparently he wasn’t sorry the digital dirt was slagging-off some Tory party officials.

McBroon skulked in his Downing Street lair after ordering his spin-mongers onto the airwaves, further denting their party’s credibility with pathetic performances that fooled no-one. For the UK’s Over-50s it brought back painful memories of Labour’s final months in office decades ago, when the country was bust and being bailed out by the IMF.

Life then was a bit third world and many Over-50s are wondering if history will indeed repeat itself for them as this time around the McBroon version of Labour has nicked all but their own pensions, emptied the national coffers of fiscal reserves and workplaces of what could soon be three million jobs.

President Obama blamed greedy and uncontrolled banks for the current recession and said he’d make sure it didn’t happen again. McBroon stayed silent because the same greedy banks also went uncontrolled in the UK where he himself had set-up the FSA to regulate their activities.

Also today, housing figures improved in both countries, but the UK’s remain a lot short of the 1,000 a day sales being attained in Spain, where the banks were totally under the control of the Bank of Spain. No toxic debt, no busted banks and plenty of mortgages for Brits who are thinking their favourite overseas destination might provide a more secure future for their property investment and lifestyle aspirations.

Spain’s recession has resulted in plenty of bargain Spanish bank repossessions because of the greedy developers and local mayors that can be grabbed for up to 50% less than current valuations. The banks will provide generous mortgages at low interest and tourism figures are good enough to keep Spain in the top spot, so providing the best rental prospects for Costa property owners.

Average fares from London to Alicante are less than those from London to the McBroon capital of Edinburgh and Spain’s cost of living remains 30% less than rip-off Britain…

Life with the McBroons and the dark decade of pay-back for their misgovernment or the sunny, healthy Spanish lifestyle as a property owning extended holiday-maker or active living fulltime resident?

Blue movies corruption or Spanish blue skies

The daily wearing down of the McBroon Government credibility has reached a critical point for the over-50s and pensioners as they absorb revelations about ministers putting their digital TV subscriptions on their expenses paid by taxpayers.

The Prime Minister gets his football for free and the Home Secretary get bills for blue movies (and the kitchen sink) paid for, according to the latest media revelations.

At the time Scotland’s biggest building society collapsed, alongside those of the other local banks adding to the loss of the long-held reputation of the Scots for fiscal prudence.

The McBroons seem to be heading for further loss of street cred when the G20 bandwagon arrives in London, amid demonstrations and anticipated refusal of some European countries to throw away more tax payers cash on the banking and government follies that are at the root of the current recession.

They know the McBroons are living beyond their means, having already brought the UK to its worst fiscal state and now wanting to save their own skins by sharing out the blame on Germany, France and Spain - who are faring light years better.

Best of the bunch is Spain, where todate, just one minor bank has been bailed out by the Bank of Spain causing the first big drop in banking share prices. But because the country has more financial controls than any other, the banks there are not exposed to the toxic debts prevalent in so many other countries with inferior fiscal governance.

Their shares may have dipped but their credibility remains high. There are still generous mortgages to help Brits, other north Europeans and Russians snap-up the amazing property bargains and it is likely that Spain’s property market will recover soonest as a result.

In the longer term the country offers greater governance credibility, lower cost of living and UK pensions can be collected from the local bank on the way back from the beach or a round of golf.

So over 50s may consider that buying a bargain property while they are available as a smart move that offers a blue skies climate, laid-back lifestyle and culture that are going to be good for fulltime living.

Spain moves could aid crashed Brits

Brits are biting the bullet every day as the media reveal more bungling of the ruling McBroons and their cosy cohorts in the banking business.

Having forced Lloyds Bank into a shotgun marriage with busted HBOS, McBroon preened how single-handedly he’d saved British banking and trotted off to meet the more sensible leaders of other countries to “lead the world out of recession”.

He never paused to get the Bank of England, his beloved and disgraced Financial Services Authority (FSA) nor his army of foolish fiscal mandarins to check the balance sheet of beggarly HBOS. Nor did Lloyds do much checking, in their haste to grab the McBroon billions in bribes if they saved his skin.

Ten billion quid is a lot of money and that’s what Lloyds will have to write off having found toxic assets in HBOS. It was comeuppance week for the British bankers when they trotted along to Westminster to say sorry for fouling up the world economy and wrecking the lives of millions.

They said it wasn’t their fault though…implying that that the FSA, operating the light touch” governance of McBroon for a decade or so, had not rapped their knuckles or threatened to downgrade the chateau wine at their next cosy luncheon..

So where to now for cash-strapped Brits, whose property assets and pensions are worth a third less than they thought and the markets that govern the prices are in total disarray and unlikely to show any growth for years to come, according to some pundits.

Think Spain, where the banks were banned from getting involved with American trailer trash mortgages, are still reporting good profits and have plenty of cash waiting for mortgage applicants. They also have the best interest rates for savers with one deal from La Caixa at 6% on 12 month call, being over-subscribed by a long way.

The Spanish banks also have a growing supply of repossession homes at up to 50% below current valuation and they can be purchased from specialist broker http://www.propertyinspain.net/ often with low cost subrogated mortgages built-in.

It’s an obvious way out of the crazy world of the McBroons, who seem to turn everything they touch into a solidifying rock bottom of common sense and diligence.

It seems few of the McBroons have actually run anything remotely commercial in their lives. If UK PLC was a commercial undertaking it would be going bust about this time and the McBroons would be collecting their redundancy payments and handing back the keys to the limo.

More praise for Spanish banking

As American, British and German regulators thrash around in useless unison in a last-ditch effort to save the financial world from its foibles, follies and foolish lending, Spanish bank Santander is poised to make more juicy pickings from the corpses of failing banks.

It has gobbled-up Abbey, Alliance & Leicester and Bradford & Bingley to become the second biggest savings player in the UK with 25 million customers and 10% of the market and has hundreds more High Street branches to welcome savers and from which to dispense a few mortgages.

Santander, stronger than most of its European rivals, seems at the top of its game and is poised for more acquisitions. There have been rumours of a takeover bid for Wachovia, America’s biggest savings bank.

Could this be as good as it gets for this Spanish bank? While Santander basks in the glory of positive press (including earlier blogs from ourselves), the world economy is quietly falling apart, thanks to a bursting property bubble, banking mismanagement and lax Governmental regulation.

Santander has become strong because it was forced to stay away from the dodgy off balance sheet dealings that have caused US and UK banks to dive in the resultant credit crunch. As a result of the higher-than-usual provisions needed to comply with Bank of Spain regulation, they took few risks and have a pot of dosh to buy the weak and infirm among rival banks.

All it needs now is for the Bank of Spain to declare they will guarantee all savings in Spanish banks and Santander could become a mighty magnet for savers in Spain, Britain and Latin America. It happened last week when the Irish Government gave a 100% savings guarantee and now followed confusingly by Germany.

It will not be lost on savers that Spain has regulated its banks better than the rest of the world and that includes the pathetic performance of the UK’s McBroon & Co. A choice between calm, ethical banking and chaotic, catch-up banking regimes is a no-brainer for general savers.

For savers wanting to buy a property in Spain, getting a decent mortgage from an Abbey branch near you might be worth checking-out? Local contact, international banking muscle, stronger currency as the euro outperforms sterling, are factors that provide reassurance – a rare commodity in the current economic climate…