100% Mortgages

“Today’s news could open the floodgates for property sales in 2010”

Pent-up demand for property in Spain, stifled in the past year by the effects of the global recession but converted into sales since the start of the new year, thanks to a series of ‘buy now’ incentives, gets a further boost this month with the news of new 100 per cent low-cost mortgages available on a wide range of properties for sale at the lender’s valuations.

In the past 10 weeks, the Cheltenham-based Almanzora Group has successfully sold brand new freehold properties at an average rate of more than three per week at Desert Springs, Europe’s only international award-winning luxury family resort and championship desert golf course in the Almeria region of south-east Spain, and in two nearby locations – on the beach at Playa Marques and in the traditional Spanish fishing village of Villaricos.

“We adjusted prices to take account of currency exchange rates and the current market situation, and the result has been a steadily rising flow of enquires and sales,” reports the group’s sales and marketing manager, Simon Coaker. “Now we expect a further surge in sales following the news that Spain’s Bank of Andalusia* has selected these developments as the flagships for the launch of its new mortgage offer. This could open the floodgates in terms of property sales in 2010.”

* The Bank of Andalusia (Banco de Andalucía SA), which serves Andalusia’s eight provinces and operates more than 300 branches, is more than 80 per cent owned by one of Spain’s top and most conservative of banks, Banco Popular Español.

Available on apartments like those pictured here – as well as townhouses, cottages, villas and country houses at Desert Springs in Spain and new homes for sale in two nearby locations – on the beach at Playa Marques and in the traditional Spanish fishing village of Villaricos – are 100 per cent mortgages based on independent valuations which, in some cases, are larger than the prices actually payable by purchasers. For details call +44 (0) 1242 680 116 or visit www.almanzora.com

Available on holiday homes and investment properties ranging from apartments, townhouses and cottages to villas and country houses, the 100 per cent mortgages based on independent valuations undertaken by the bank are available to Spanish national and overseas purchasers alike.

“In some cases, the mortgage available is larger than the amount actually payable by the purchaser,” says Simon. “This is because, following last year’s price reductions, current prices of a number of properties are actually lower than the bank valuations.”

This is the catalyst which will accelerate demand to levels which make price rises inevitable sooner rather than later predicts Simon who has just unveiled a portfolio of selected properties offered at exclusive prices – some with as much as 55 per cent off the list price. He describes them as ‘once in a lifetime opportunities for would-be second-home owners.’

The new 100 per cent mortgages can be paid off over periods of up to 35 years at interest rates as low as 2.7 per cent. On this basis, repayments on the mortgage for a €178,000 two-bedroom, two-bathroom apartment at Desert Springs would be only €400 per month. Repayments are even lower during the first two years when interest-only payments are required.

For investors who place their properties in the year-round rental pool at Desert Springs, the mortgage repayments will be offset by the income which can be achieved – typically €294 per week for a one-bedroom apartment based on two people sharing in the low season, rising to €462 in the high season. These figures are net rental income, after deduction of the charges made by the tour operators marketing properties for holidays.

“Investors will be reassured by the fact that, throughout 2009, our holiday rentals business at Desert Springs held up well with more than 48 per cent occupancy in that type of apartment,” reports Simon. “This reflects the awareness and popularity of the resort for golf breaks and family holidays, backed by a high level of recommendations to friends by property owners and guests, many of whom return year after year.

The popularity of holidays at Desert Springs – which has increased this year with the addition of the resort to the destinations offered and booked by James Villa Holidays, the UK’s leading villa holiday specialist – has prompted expansion of the number of properties in the resort’s rental pool for 2010, in order to keep pace with demand.

In addition to the 18-hole championship golf course at Desert Springs, other facilities which make it a popular choice for holidays and short breaks include its award-winning El Torrente restaurant and the Croc Restaurant – part of the family-friendly Crocodile Club – as well as the 18-hole championship golf course, day spa, sports club, tennis and paddle courts.

Simon believes that the steady throughput of holiday visitors to Desert Springs last year has been a major factor in the higher-than-expected levels of both enquires and sales of properties since the new year.

He said: “We are now at the very bottom of the cycle. Properties discounted to 55 per cent of previous values are priced more or less at the basic cost of their construction alone, excluding land and finance, so these levels will not fall further. We are seeing the start of the next stage of the process we predicted back in 2008. We said then that ‘the Spanish wheel will finally turn’ with the overall property market in the country and its coastal provinces eventually recovering to values which, in high-calibre developments like those at Desert Springs and Villaricos, were undreamed-of at the height of the previous boom.

“Over the years, the property market in Spain – especially the ‘investment’ market – has proved to be extremely cyclical. It is inevitable that, with the ready availability of 100 per cent mortgages, demand will soon start pushing prices up again, so clearly now is the time to buy.”



For further information contact: The Almanzora Group
Email: tag@almanzora.co.uk
Telephone: +44 (0) 1242 680 116