The Property Market

Property has proved to be the most consistent and stable vehicle for wealth creation and its values are doubling every 7/8 years on average. Since 1956, the compounded average annual increase in UK house prices has been 8.5% (Source: Datastream). The UK residential property market includes 20.6 million private sector dwellings with an average value of £128,265 and has grown by an average of 13.6 % per annum over the last 7 calendar years, with average residential property prices in greater London having grown by 18.8% per annum on average over that period. (Source: Office of Deputy Prime Minister, dated 28 February 2003). History shows that since 1970 property doubles in value every 7/8 years, taking the average house value from £5000 then, to well over £100,000 now and possibly nearer £150,000. If you owned a million pounds worth of property in 1996, today it would have doubled in value and you would have earned over one million pounds in Equity. In the 32 years that the Department of Environment has kept statistics, property has risen in 28 of those years and fallen in only 4 years. “Property is like a bad hair cut.... It always grows out!” “Make hay while the sun shines...”

Why Invest Off Plan?

Capital Growth is at its steepest growth rate and can be much higher than the average property appreciation. The property is being bought at the earliest stages and therefore at its cheapest. Perfect for short-term investment. Simplicity for the armchair investor, with no property taxes to pay if selling again before completion, especially in countries such as Spain where contracts are fully re-asignable. Perfect for long-term investment. A new build is extremely attractive in the rental market, therefore attracting the ‘young professionals’, and in Spain, attracting the golfers as well as the holiday makers. A new build in a high-growth area allows for even greater returns on the original investment. Areas of high growth in the UK such as the Docklands, Cardiff Bay, Manchester, Leeds and Glasgow have all undergone major ‘facelifts’ and benefited from huge government and private investment.

What is Leverage Finance?

“Putting as little as possible of your own money into a deal so that you can lock into profits on a much higher value as opposed to your initial investment value” An example if you invest in a bank: Invest £20,000 @ 10% per annum £20,000 > £22,000 Gain = £2000 An example if you invest in property: Invest £20,000 to secure a £200,000 property Growing @ only 10% (much less than the national Spanish property growth) Invest £20,000 @ 10% c.a. per annum £200,000 > £220,000 Gain = £20,000 In this example, you invest 10% of property purchase price and the return on your investment is 100%

Why Invest in Spain?

There have been exceptional results over the last few years with economic growth looking favourable for the next 4-5 years. Spain has the fastest growing economy in the EU and has outpaced the EU average every year since 1995. The Spanish economy grew by 2.5 - 3% in the last 5 years, compared to the average of 0.8% in the rest of the EU area. Spanish Capital Appreciation has averaged 15% per annum on existing properties consistently for the last 10 years. It can range between 15-50% per annum on new builds. Superb weather in Spain Spain is the A1 spot of Europe, the most popular European holiday destination, now even beating France in the number of annual holiday makers. Spain hosts a multicultural society that attracts all nationalities including British, Germans, French, Scandinavians and Russians. The micro climate along the South Eastern Coast ie the Costa Blanca down to the Costa del Sol, guarantees on average over 320 days of sunshine per year. This area has been quoted by The World Health Organisation to be one of the healthiest places to live in the world. There is a strong demand for short-term rental accommodation Over 42 million people a year visit Spain, approximately the size of the population of Spain. Spain is a ‘service’ country as it has been through out its history and therefore it knows how to accommodate visitors. From stunning homes and beaches, to efficient autoroutes and airports, from outdoor activities to a whole selection of restaurants and nightclubs… it has it all. Apart from the usual holiday-makers, there is also an all-year round demand for accommodation from golfers. Golf is a huge industry in Spain. Over 5 million golfers visit each year, increasing by at least 500,000 each year since 2000. (www.andalucia.com). In Costa Blanca for example, there are 22 golf courses already and this will increase to 90 18 hole golf courses within the next 7 years…. Low cost airlines Flights to Alicante, Valencia, Murcia, Almeria and Malaga can be as cheap as £29! There is a new international airport to be completed by 2007 in the Murcia/Almeria region, which is expected to attract another 5/6 million visitors per annum after the first six months. Low property prices and low cost of living Despite increasing prices in some holiday destinations (eg Marbella) the prices for property in Spain are still relatively cheap in comparison to places like the south of France. Taxes paid on Spanish property compare favourably with other areas of the EU. The cost of running homes is also very low; eg. a client has found one month’s worth of Council Tax in the UK will pay for a whole year of equivalent taxes in Spain. Food and wine is famously cheap. 1 Million Europeans are expected to retire to Spain because of the lifestyle being so attractive. As long as you prove you can support yourself, anyone can live in Spain. Over half a million British people live there permanently already and this is on the increase. Figures released on 4th Nov 2004 by the Office for National Statistics showed that last year 190,000 Brits moved overseas, Spain being the most popular destination (also backed by research made by Halifax, UK’s leading lender). In the past 12 months 75,000 homes were snapped up at an average cost of £160,000. The number of Brits buying property in Spain in the past 5 years has risen by a staggering 460%. Over 35% of all Spanish mortgages arranged in Spain are for non-Spaniards. All the developments that we handle in Spain come with fully re-assignable contracts, which is ideal for short term investors who may wish to sell before completion. Despite global and economic disasters, Spain remains ever growing with massive private and EU investment into roads, airports, infrastructure, marinas, promenades, sport complexes etc. Spain now also boasts an excellent communication network system. Its track record is excellent, stable and strong and the Market Is Booming! “Make hay while the sun shines!”