The old days of massive, flabby companies on the Costa Del Sol are long gone. The agencies who happily rented upmarket office space in high-end locations, sometimes several offices are now gone, the worst offenders for flashing the cash are bankrupt leaving literally thousands of clients in the lurch. Spending money unecessarily on lavish company cars and exhibitions held in the finest hotels took its toll on many firms here on the coast and when the sales stopped rolling in there was nothing but a black hole in their finances.

Fast forward to the present and how does the current landscape look? Different, very different. The companies that always paid special attention to the needs of their clients are still here, albeit with less of a physical presence having scaled back their running costs considerably. Many of the new generation of companies have focused heavily on the web as a medium for obtaining clients, understanding that exhibitions are not only costly, but generally pointless.

There are virtually no flashy company logo emblazoned  cars, with most firms looking to hand over that cost to their commission only sales reps. This, I feel does not benefit clients as many sales people now feel no ownership in the company they represent, which could lead to poor service and embelishment in order to get their only source of payment. This direction will change as we move forward as companies start to have heathier balance sheets, but until then freelance reps seem to be the order of the day.

The next successful companies to emerge will have a totally different philiosophy to those who fell by the wayside, they will make every employee feel part of an agency that understands and wants to genuinely help prospective buyers. They will have a customer service team rewarded for excellence in client experience, much the same as sales people who get both a basic salary and a drip fed commission structure that is linked towards looking after the purchaser every step of the way. Employees will be genuine experts in their chosen area and will provide concise, accurate advise to buyers who will be able to listen and believe the information given.

More funds will go towards improving training for employees and building  company websites ensuring they contain great quality information for clients. These are not pie in the sky dreams, but rather a framework for the successful future of real estate agencies here on the Costa Del Sol.

The return of homebuyers has continued to hold up mortgage lending figures in August, even though there is a fall in the total number of borrowers remortgaging their homes.

52,700 home loans were approved in August, a 29% increase year on year, according to figures produced by the Council of Mortgage Lenders (CML). These figures represent a fall of 5% from the previous month.

First-time purchasers were given 19,200 loans, a 22% increase the figures from  August 2008.  

Gross mortgage lending,  including home purchases, re-mortgaging and buy-to-let, dropped 36% from last year to £12.3 billion, shown by CML. Re-mortgages still remain poor, with 32,000 applications given the green light in August, a decrease of 22% on July and 57% down on August last year.

Winkworth, the estate agency, is looking to raise £1 million via a flotation on the Alternative Investment Market (AIM) further bolstering the current confidence in the property market.

The family owned franchise business wants to float in November after small surge in property prices, particularly in the London area, where many of the Winkworth’s  offices are based.

Dominic Agace, chief executive and son of the founder, Simon said the money will be used to canvas regional  estate agents to join the group and hopefully expand their business at rate of 8 new agencies per year.

A  flotation would be second time for Winkworth, which had thought about an AIM flotation in 2006 before putting its plans on hold because of the poor market conditions that were too awkward to find opportunities.

Mr Agace commented to The Times newspaper “While I don’t think the market is booming again, we are not going to see another Lehmans and what we have now is a slow easing around the country, with the exception of London, which has strengthened more drastically. The current momentum will not stop unless there is a major shock.”

The current climate has left many smaller agents in a precarious position, possibly providing easy pickings for Winkworth, who said they would give new franchisees up-market facilities and the benefits of a  brand name.

We have added another amazing home to our La Zagaleta property portfolio. This home would suit someone who is looking for an Andalucian flavour. This villa is spread over five bedrooms and also has a good sized basement that would facilitate a cinema or similar.

The views are that of the valley and countryside and there is definitely a strong sense of privacy, as you are not overlooked in any way. To view this La Zagaleta villa for sale click on the link.

The proposed fund will be looking from a wide  range of property,  across the office, retail and industrial sectors leading on from the previous James Caan fund this further demonstrates the growing appetite amongst investors to strike whilst there is a 45% decline in values.

Commercial property had an awful 2 years after the credit crisis hit in the summer of 2007,  but now values have levelled in the last two months as overseas buyers and entrepreneurs make acquisitions. Britain’s biggest property companies, like British Land, are eyeing the market for opportunity. They have £5bn or so in equity to sort out their troubled balance sheets.

Data from Cushman & Wakefield (C&W) suggested that the value of transactions in  London rose 12% to £1.6bn in the Q3 against Q2, showing the first consecutive 2 month rise since2007.

Now BNP Paribas look to raise capital for their Real Estate UK Income and Growth Fund that will be geared towards acquiring prime assets, banks needing to get rid of properties from their balance sheet, and corporate entities looking to do sale and leaseback deals.

The fund will run for five years, although apparently  there will be the option for an additional two. The fund will also look to fuel its acquisitions by raising debt not greater than 50%.

Dragons’ Den judge, James Caan will launch a commercial property fund next month with ING, because of  growing confidence within the market sector.

Mr. Caan is the latest in a list of high profile investors to display an interest, after Nick Leslau and Shaf Rasul.

UK commercial property has shown its first growth in over 2 years, there has been a 0.2% in August as shown by the Investment Property Databank. This comes after a 50% decrease since its peak in 2007.

Yields on commercial property have grown from 4.6% to approximately 7.9%, this gives you 10 times that of a standard savings account at 0.78% and over double that of the yield on 10-year gilts, currently at around 3.5%.

This positive outlook has made many investors look again at this sector.  Peter Hargreaves, CEO of Hargreaves Lansdown, who has always given rather negative views on property investment of any kind seems to also think it is worth considering.

Several funds have also recently been initiated. September saw the BDO Stoy Hayward Investment Management launched a property fund with estimated 10% yields.

Retail investors are also having a go. Last week, TD Waterhouse, stockbroker, said commercial property companies such as Songbird Estates was one of its top 10 most purchased stocks.

According to The Sunday Times Mr. Caan hopes to start the fund, with a minimum investment of £200,000 that will buy properties, concentrating on offices, at prices between £15m - £30m.

Property prices have risen again for the fifth consecutive month in a row according to September figures, making average house prices the same as they were 12 months ago.

The Nationwide house price index demonstrated a rise of 0.9% in September, they did however point out that this increase was probably unsustainable because of the high cost of rental properties and relatively low turnover.

UK average house prices are now standing at £161,816 and last month was the first occasion since last March that  year-on-year that rates have not been in the minus.

The statistics show that during the first 9 months of 2009, property prices rose by 4.1%, although they are 13.5% lower relative to the high point in October two year ago.

This is pretty surprising as I thought the gulf would have been much greater from peak to trough, I do agree that this rally is unsustainable because of the factors mentioned above and also because of the frightening levels of unemployment.

Reports indicate in the Spanish news that Llanera has come to an agreement with its creditors and will pay back  65% of its debts over a period of 8 years. After 2 years bouncing around the courts aministration process , this is though to be given a green light by a Valencian court tomorrow.

Llanera, who had a £6.6m sponsorship deal with Charlton Athletic in December 2005, had to get protection from creditors in October 2007, the firm could not handle its €700 million debt mountain, as it was generating €5 million in sales.

The company owed more than 100 million GBP to Lehman Brothers, whose collapsed last year, Llanera was one of the first big Spanish developers to run out of cash when the Spanish property market tanked. There are several other high profile firms who have also gone into adminstration, including  Fadesa and Aifos.

Spanish property prices fell at a accelerated rate for the second quarter and many economists think that prices are unlikely to have hit the bottom because of housing stock and forecast of a protracted recession.

Property prices fell by 7.7% year on year in Q2,  demonstrated by official data released on Wednesday, showing a year of falling prices and a slight worsening of figures in comparison to the previous 7.6%  drop between the months of January and March.

Second quarter property prices dropped by 0.4% on a quarter upon quarter basis, against a 2.7% drop in Q1 according to the National Statistics Institute.

The price of brand new properties decreased by 3.9% year on year, the second quarter of falls. Existing property prices dropped by 11.2%, slowing down from the previous drop of 12.5%  in Q1.

There are expectations of a protracted, drawn out recession, unemployment at a rate more than double the European median and new property stock piles which are  similar to that of much larger economies will result  in the property market being in a slump for some time.

Property values have been softened by more difficult mortgage lending criteria, which fell 33.9% in July, and real estate sales are 20.3% less than the same month year on year.

Estate Agency

Fees or commission are always paid by the seller, unless you have an agreement that states otherwise. There are conversely, search agencies (property finding services)  who will levy the cost to the buyer.

Generally agents will charge between 2%-10% of the sale price, although  because of the lack of buyers in the current market few are charging the higher level of this scale.

Legal Costs

A lawyer – Abogado – will levy a charge commensurate with the service you need. Many solicitors charge approximately 1% of the purchase price in legal costs. On occasion some lawyers charge 1.5% upwards of the actual transaction price. If the purchase is easy and there are no unforseen circumstances this figure is a high, one suggestion is to ask to be billed on an hourly rate. Think carefully before agreeing and always negotiate.

Mortgage costs 

When valuing a property, this is paid for the by the buyer and costs approx. €500.  There is also an  arrangement fee, generallly around 1% of the mortgage. Finally a mortgage  will also increase the Notary expenses.

Notary Expenses

Notary expenses are paid by the buyer and are calculated according to the purchase price shown on the deeds of sale. Calculate Notary fees at being approximately 1% of the purchase price, howver in many cases the Notary fees are nearer to 0.5%  of the price shown on the deeds.

Property Registry  Fees

Expenses registering the sale with the land registry are generally paid by the buyer, and are charged relative to the purchase price shown on the deeds.  Calculate 1% of the price to be sure you are covered, again this can be less.

Additional Costs

Do get a survey done on the property.

To Summarize - you must allow for up to 10% of the purchase price in taxes and ancilliary costs.

If you are taking out a mortgage these costs are higher - in this case allow for upto 13%.