Tuesday 30 September 2008

Banks


Spain's largest bank, Banco Santander, has arrived at the higher reaches of the European banking league while working under a strict regulatory regime which could offer some lessons for Britain's beleaguered banking sector.
For many years Santander has been a conservative, stolid operator suffocated by Spain's central bank. But the imposition of those rules has helped the bank avoid the worst of the credit crunch and left it as the fourth biggest mortgage lender in Britain.
Based in the Cantabria region in the north of Spain, it grew from humble regional beginnings largely through trade routes and historic ties to Latin America, where it has built up a substantial business. By some estimates it has 10% of the Latin American market and many of the region's richest people as customers.
In the early 1990s it avoided a banking crisis that forced Spain's central bank to rescue mortgage lender Banesto. Santander bought Banesto at a knock-down price and became a major institution.
After the dust settled, the government forced banks to keep a higher ratio of capital aside to cover bad debts. In the UK, banks typically make provisions to cover 80-100% of their bad debts. In Spain, banks must cover 150% of bad debts.
The Spanish government also prevented banks from disguising the level of their liabilities that are housed in off-balance sheet vehicles. By contrast, UK banks sold and run mountains of mortgages off-balance sheet, and to avoid tax, usually offshore.
Spanish mortgages are also rarely sold to cover 100% of a property's value. In the main, homebuyers must find a 20% to 30% deposit. Discounted teaser mortgages, which have become the staple of the US and UK mortgage markets, are also little known in Spain.
So while Spain is suffering a steep property price crash and is already in recession, it is only a small number of regional banks that are experiencing mortgage troubles.
Spanish Banks have also come in for some praise from the Bank of England deputy governor Sir John Gieve - he suggested that the Uk's banks should have to put aside reserves in times of boom that they can draw down in times of bust to prevent banking crises like the current one pulling down whole economies in their wake. He pointed to a system called "dynamic provisioning" in Spain as an example of a system which works well. Spanish banks have been notably unscathed by the credit crunch and remained conservative in their lending practices during that country's recent housing market boom, meaning they are not unduly threatened now that Spanish property prices are tumbling.

Thursday 25 September 2008

Too many roadblocks for buyers

In theory, slowing sales and the prospect of further weakness after the banking meltdown on Wall Street should mean it’s a buyer’s market at the moment.
The reality though is a bit different. Mortgages are proving difficult to get so that enterprising bargain hunters are finding that although the time should be right for them, it is sometimes impossible to leap into action.
Banks are rejecting those who do not have near-perfect credit or long credit histories. Buyers are finding that no matter how much they have for the down payment, they seem to need more.
There are definitely buyers today that are being forced to either downsize the property that they want to buy or simply wait until they have the credit and cash to qualify for a mortgage today.
And even when the perfect buyer comes along, with good credit, a sizable deposit to put down and a pre-approved mortgage (yes they are out there), we have had a vendor that has pulled out of a deal even after an increased offer (by more than 10%) was accepted, verbally and in writing.
Give me a break - is it a surprise agents can have such a bad reputation when the people we deal with behave in such a fashion.
That's my rant for the day done with!!! Have a good one.

Friday 19 September 2008

Alicante - the Volvo Ocean Race


If you have been in Alicante recently, you may have noticed just a little bit of "sprucing-up" down by the port area. Over the past few months, the city has been living the countdown to the start of the 10th Edition of the Volvo Ocean Race with great enthusiasm and is now ready to offer the most spectacular start in the race’s history. Amongst other novelties, the route for this edition is the longest and most extreme to date. For Alicante, a maritime city par excellence, the sea and all things nautical are a way of life and the city intends to enjoy this experience to the full.
Today sees the official opening of the "Village" in the harbour of Alicante. So until the 11th of October, the start day of the Volvo Ocean Race, there will be 23 consecutive days to enjoy the entertainment, sport and excitement allowing visitors to live the Volvo Ocean Race experience first-hand.
The Route
There are 11 stopovers:

This edition includes new countries such as China, India or Russia in the longest route so far: 39,000 miles.

Port Event Date Distance
Alicante, Spain Leg In Port 4th October 2008
Alicante, Spain Etapa 1 Race Start 11th October 2008 6.500 n.m.
Cape Town, South Africa Leg 2 Start 15th November 2008 4.450 n.m.
Kochi, India Leg 3 Start 13th December 2008 1.950 n.m.
Singapore, Malaysia Regata In Port 10th January 2009
Singapore, Malaysia Leg 4 Start 18th January 2009 2.500 n.m.
Qingdao, China Regata In Port 7th February 2009
Qingdao, China Leg 5 Start 14th February 2009 12.300 n.m.
Rio De Janeiro, Brazi Regata In Port 4th April 2009
Rio De Janeiro, Brazi Leg 6 Start 11th April 2009 4.900 n.m.
Boston, USA Regata In Port 9th May 2009
Boston, USA Leg 7 Start 16th May 2009 2.550 n.m.
Galway, Ireland Regata In Port 30 May 2009
Galway, Ireland Leg 8 Start 30th May 2009 950 n.m.
Gothenburg, Sweden Leg 9 Start 14th June 2009 525 n.m.
Stockholm, Sweden Regata In Port 21st June 2009
Stockholm, Sweden Leg 10 Start 25th June 2009 370 n.m.
Saint Petersburg, Russia Race Finish 27th June 2009

Let the spectacle begin!

Tinsa €/m2