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Posts Tagged ‘Editorial’

A holiday home in Portugal

Monday, July 27th, 2009

From Porto to the Algarve, Portugal has some fine property for sale. Graham Norwood picks some of the best

Snooping around: Rural, urban or renovation

Monday, July 27th, 2009

From the canals of London to a gated enclave in Portugal's Algarve

Writing home: Properties with literary connections

Monday, July 27th, 2009

Fancy a house with a literary past? Huma Qureshi opens the book on some inspiring properties

Trading up, trading down

Monday, July 27th, 2009

From the raw beauty of the Cairngorms to the quiet reaches of Cornwall

Head to Portugal for your holiday home in the sun

Friday, July 24th, 2009

Prices in Portugal are down less than in neighbouring Spain, but pick your spot carefully. Graham Norwood is your guide

Britons seeking a bargain holiday home in the sun may look to Spain or France, but they shouldn't ignore one of Europe's more salubrious locations. If you reckon Portugal is merely an upmarket version of Spain, think again; it has a different philosophy to its Iberian neighbour.

In 1993, laws were passed to restrict overdevelopment in designated coastal areas, mostly on the Algarve in the south, so demand sometimes exceeds supply. Although prices have been on a rollercoaster, they have fallen less than in any part of Spain.

By far the most popular holiday home area is the Algarve, due to its 280 days of sunshine a year and because large numbers of budget flights access nearby Faro airport. But that makes it Portugal's busiest region, too.

The Estoril coast south of Lisbon is also popular, while the northern coast is increasingly in favour.

Foreigners tend to buy new homes, which are generally of a higher quality than in Spain. Expect to pay €120,000 (£104,000) for a small apartment (twice this for a sea view), and €1m for a family-sized detached villa near a beach.

Brits considering the Algarve should bear in mind that, historically, it is a region where property prices have seen much more dramatic ups and downs than the wider national market.

Go back to the 1960s and the Algarve was visited only by small numbers of Portuguese holidaymakers, but by the end of that decade, luxury hotels and golf courses began springing up. In the early 1970s it was popular with British holiday and retirement home buyers.

All development came to an abrupt halt after the 1974 revolution, according to Dr Michael Ball, the author of an annual Royal Institution of Chartered Surveyors review of European housing markets. "Investors lost a fortune and tourism to the Algarve practically ceased by 1975," he says.

The pace of development went back into overdrive in the late 1980s, with well-heeled British buyers flocking there. Algarve prices plummeted in the early 1990s and shot up again at the end of the decade, before another dive in 2003.

The Global Property Guide website reports prices in the Algarve fell 4.4% over the 12 months to last September, after a tiny rise in 2007 and a 6% increase the year before. Looking at Portugal as a whole, prices slid 4.8% in the year to last September, with the Alentejo and Centro regions hit hardest. "With the economy hurtling into recession, the Portuguese housing market is expected to continue its downward price spiral until end-2010," says the site. Some potential buyers may see that as good news, others as a reason to steer clear.

Buying in Portugal remains more complicated than in much of mainland Europe. First, you need a tax card and number from the local council in the area where you wish to buy, and you must nominate a Portuguese address for documentation; usually the selling agent will act as this contact. Second, very few Portuguese finance houses lend to foreign buyers, so most Britons must arrange a mortgage at home. Third, many flats – especially those built before the legal changes of 1993 – are run by residents who set up committees to organise services like cleaning and maintenance; so it can be hard for foreign-based buyers to get involved. Set aside 2% of the purchase price for legal fees and 1% for Portuguese land registry charges. Add 1% each for turning on utilities and arranging a Portuguese mortgage. Stamp duty can be 7.5% if you buy at an auction, and there is transfer tax on secondhand homes of up to 10%.

The Portuguese estate agency profession is regulated, so individual agents are more qualified and more professional than in Spain, but charges are unregulated – when you come to sell, the commission can be a whopping 10%, though you can haggle.

Most agents list properties by square-metre floor size; some include outdoor patios and some don't, so check to make true comparisons.

All mortgage debts and local taxes are property specific. This means the previous owner must clear them before you buy, otherwise you inherit them.

Anyone wanting a pure investment and long-term tenants (professional renters, not holidaymakers) should furnish their properties, but remember there is little demand in resort areas, so stick to Lisbon and Porto.

Gallery: Homes in Portugal

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How the surveying profession failed

Friday, July 24th, 2009

Life was easy for surveyors when properties were flying off estate agents' books, but the housing market downturn has raised questions about their role

Quite what does a valuation surveyor actually do? Don't get me wrong, some of my best friends are surveyors. I'm not anti-surveyor, but ...

A report from the Bank of England this week said lenders are struggling to value homes in the current market, causing delays which are leading to the break-up and collapse of chains.

How different from the halcyon days two years ago when the job of a valuation surveyor was little more than establishing the "comparables". A tough task indeed: dropping in for a chat at a local estate agency, and finding out what similar properties have gone for. If that was too strenuous, there was always the Land Registry's website, holdings details of actual sale prices. Indeed, why even employ humans? Many lenders found it was simpler and cheaper to use "automated valuation models" during the boom years.

Yet the homebuyer still got stiffed with an steep bill for a valuation, typically around £350 on a £200,000 purchase (although often waived for remortgages).

Today the automated valuation models are close to breaking down. With so few sales, it's impossible to establish comparables. How much is a house worth on a street where there has not been a sale for a year? Valuation surveyors are having to work twice as hard on half the amount of business. Lenders want valuations pushed down, fearful of further falls in house prices. Buyers are in chains which fall apart after a low valuation prevents them from obtaining a big enough mortgage to go ahead.

The Royal Institution of Chartered Surveyors should be taking a long hard look at itself. How truly "professional" is the work of its members? Who was valuing buy-to-let flats at such absurdly inflated prices? How does a valuation surveyor get it so wrong? And what sort of action should a professional body take against members who have so discredited themselves?

The professional skills needed for the structural element of a home survey will always be essential. But the valuation bit? Clearly the profession failed, hypnotised like the rest of the country into believing markets rise in a straight line upwards.

Valuers live by the maxim that the price of a property is the amount that someone is willing to pay. But this has turned out to be nonsense. In truth, the price of a property is the amount someone is willing to lend you to buy it. Value is not in the eye of the beholder, it's in the spreadsheet of a lender.

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Credit crunch reaches world’s most expensive streets

Wednesday, July 22nd, 2009

The global financial crisis has squeezed property prices, but how has it affected those at the very top?

Avenue Princesse Grace in Monaco is the most expensive street in the world, with each square metre in an apartment setting you back £73,000 – or about the same as a 70-square-metre apartment on the seafront in Hastings, according to Dow Jones' Wealth Bulletin.

But the palm-lined street, named after the Hollywood star Grace Kelly and popular with Russian oligarchs, is suffering from "la crise du credit" like everywhere else. The bulletin shows top prices paid for apartments, are down by 37% from 2008's peak of £116,000 a square metre.

Overall, prices paid for prime residential property in the world's fanciest locations have fallen by 12% over the past year, although Europe fell less sharply than the US and Russia.

Via Suvretta in the Swiss ski resort of St Moritz was the only street on the list where prices for top properties have risen since 2008. Prices are up by 18% to around £27,500 a square metre.

The world's second priciest street, the Chemin de Saint-Hospice, is a 20-minute drive along the coast from Monaco, snaking through on Cap Ferrat. It numbers just 15 houses, commanding beautiful Mediterranean views.

According to Wealth Bulletin, local estate agents say there is one property for sale on the street, but it is being sold privately and its price a closely guarded secret. It estimates that property on the street goes for an average of £61,000 a square metre.

New York's Fifth Avenue pips London's Kensington Palace Gardens to third place in the survey, with apartments selling for around £44,000 a square metre. Although a 400 sq/m apartment overlooking Central Park on the Upper East Side of Fifth Avenue sold for $29m in June, local agents say the market has come off the boil, and remains affected by a lack of supply

Fourth-placed Kensington Palace Gardens is Britain's most exclusive address, best-known as London's embassy row, including the Russian delegation. Prices in the street are estimated to have fallen by 15%-20% over the past year.

The world's top 10

1. Avenue Princesse Grace, Monaco, £73,000 per sq/m

2. Chemin de Saint-Hospice, Cap Ferrat, South of France, £61,000 per sq/m

3. Fifth Avenue, New York, £44,000 per sq/m

4. Kensington Palace Gardens, London, £40,000 per sq/m

5. Avenue Montaigne, Paris, £33,000 per sq/m

6. Via Suvretta, St Moritz, Switzerland, £27,500 per sq/m

7. Via Romazzino, Porto Cervo, Sardinia, £26,000 per sq/m

8. Severn Road, The Peak, Hong Kong, £24,500 per sq/m

9. Ostozhenka Street, Moscow, £21,000 per sq/m

10. Wolseley Road, Point Piper, Australia, £17,000 per sq/m

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