Buy Smart in 2009 - you have the power!

there are still good ways to buy abroad | Primelocation

As if the credit crunch and the impending recession weren't enough, the downside for Brits wanting to buy overseas has been compounded by the plummeting value of the pound.

In just 12 months, sterling's value has slipped from €1.45 to under €1.20 - a fall of almost 20%. Against the dollar, the decline has been even more dramatic. As recently as July you could get $2 for every pound; by late November that had fallen to under $1.50.

Psychologically, it's a serious deterrent for buyers, as it means you could be paying significantly more for the same property than you would have a year ago. What's more, the cost of living in most overseas countries has also gone up accordingly - so that pint of beer, restaurant meal and weekly grocery shop will all be more expensive.

There are a few countries outside the dollar and the euro where the exchange rate pain has not been quite so profound - TURKEY springs to mind - but by and large, overseas homes are less of a bargain than they used to be.

So what can you do about it? One option - if you believe that the pound will make a recovery - is to take out a mortgage in the local currency. Say you want to buy an apartment in France or Spain that costs €200,000, and you take out a Euro-denominated loan for €150,000. Then only the €50,000 deposit will suffer from the conversion at a poor exchange rate, and if sterling recovers in a year's time you could potentially refinance the property at a more attractive conversion rate. This works especially well if you will be earning rental income in the local currency to pay the mortgage interest; but it is a high risk strategy - after all, sterling could decline still further.

Another option is to look in markets where property prices have fallen significantly. Spain is the obvious example; in spite of official figures which purport to show that property prices are still rising, evidence on the ground is that prices have already fallen by around 20% on average, and with many developers on the Costa del Sol or Costa Blanca in financial trouble you could get an even bigger discount, wiping out the effect of sterling's falling value. But don't buy just on the discount - after all, too many properties in Spain were over-priced in the first place.

Ask us how to save money on your new mortgage and buy smart in 2009.

Nigel Salmon - Girasol Homes 44 1974 299055

www.girasolhomes.co.uk * www.girasolhomes.com * www.girasol-bespoke.com

Why sterling might recover - Investors Chronicle

It's easy for an economist to look stupid - he only has to make a forecast. In this spirit, then, here's a prediction - sterling will recover against the euro in the next 12 months.

There are four reasons for this.

First, despite recent lectures on fiscal policy from the Germans, the euro zone economy is in a horrible mess. Latest figures from Germany show that manufacturers' sales fell by 4.2 per cent in November alone, with sales to euro area economies dropping 6.3 per cent to stand 12 per cent below last November's levels. And, in France, industrial production has slumped 7.4 per cent in the last two months alone (that's not annualised, just the raw drop). What has a benefit to the euro zone in the upswing - a larger manufacturing sector more exposed to world trade - has become a curve in the downturn.

Insofar as the pound's weakness reflects a view that the UK economy is the sick man of Europe, it is therefore unjustified.

Secondly, any recovery in global stock markets this year would probably benefit the pound. There's been a close correlation for years (0.45 since January 1991) between annual changes in the €/£ rate and in the All-Share index; when global share prices rise, so does sterling.

So, if investors sense this year that an economic recovery is coming - even if it doesn't actually materialise until 2010 - or if they rediscover their appetite for risk, sterling should rise.

Such a prospect might seem remote now. But remember, 12 months is a long time in financial markets.

It's in this context that the UK's current account deficit matters. When investors are nervous, they traditionally avoid currencies whose countries are running deficits. And when they recover their nerves, such currencies often bounce back. In itself, the UK's deficit is no reason to expect the pound to stay low. After all, we've had it for years, even when sterling was strong.

Thirdly, there's some evidence that the €/£ rate mean reverts. Since January 1990, there's been a significant negative correlation (minus 0.37) between the level of the €/£ rate and subsequent annual changes in it. A strong pound leads to a falling pound, and a weak pound to a rising one.

In other words, foreign exchange markets can be just like stock markets - they over-react, causing prices to rise or fall too much. The very fact that the pound is weak, therefore, might be telling us that it is too weak.

Fourthly, sterling is under-valued. Our chart shows one measure of this, based upon relative productivity in the UK and the euro zone. This measure has some predictive value; in the past, when sterling's been below it, it has risen in the following 12 months. It is now more under-valued than at any time since at least 1990.

We shouldn't make too much of this particular measure. But thinking in vaguer (and, therefore, truer) terms brings us to the same conclusion. It's hard to see a shock to UK inflation, output or productivity in recent months that the euro zone hasn't similarly experienced. So it's hard to see how any measure of sterling's 'fair value' should have collapsed, which, in turn, suggests that the currency is under-valued.

Now of course, exchange rate forecasting is a mug's game, and economists shouldn't set themselves up as futurologists. The message I'd take from this is that it's easy to tell plausible-ish stories about the future. The trouble is, there's an almighty gap between plausible and true.

Business finance news - currency market news - online UK currency markets - financial news - Interactive Investor

Business finance news - currency market news - online UK currency markets - financial news - Interactive Investor

FRANKFURT (Reuters) - The European Central Bank cut its benchmark interest rate by 50 basis points to 2.0 percent on Thursday, matching its lowest ever rate, and its president said inflation risks continued to diminish as the economy weakened.

Jean-Claude Trichet said economic data and surveys since the ECB's last meeting pointed to a "further weakening of economic activity around the turn of the year, indicating the materialisation of previously identified downside risks to activity."

But he appeared to flag a further rate cut was likely in March rather than February, telling a news conference the "next important rendezvous" would be in March as the central bank would have fresh economic forecasts then.

The next meeting was only three weeks away, he said.

Girasol Homes' latest mortgage rates will benefit from this rate cut, more news to come shortly.

MORTGAGE PRODUCTS
INTERNATIONAL MORTGAGE MATRIX JANUARY 2009

COUNTRY MAX. LTV MAX TERM MINIMUM LOAN INTEREST ONLY INTEREST RATES FROM CURRENCIES AVAILABLE
ANDORRA 70% 30 YEARS €30,000 YES 5.7% €
AUSTRALIA 80% 30 YEARS £50,000 YES 6.45% AUS$ £
BULGARIA 75% 25 YEARS €40,000 YES 3.5% €
CANADA 70% 30 YEARS US$75,000 YES 4.35% CDN$
CAPE VERDE 50% 35 YEARS €50,000 YES 6% €
CARIBBEAN 70% 20 YEARS US$500,000 NO 6.5% € $ £
CYPRUS 80% 40 YEARS £20,000 YES 4.6% € $ £
CZECH REPUBLIC 80% 20 YEARS CZK200,000 NO 5.2% CZK
DUBAI 50% 15 YEARS £75,000 YES 5.09% € $ £
FRANCE 100% 30 YEARS €50,000 YES 4.95% € $ £
GERMANY 70% 30 YEARS €25,000 NO 4.09% €
GIBRALTAR 80% 40 YEARS £50,000 YES 6.64% £
GREECE 80% 25 YEARS €40,000 YES 4.3% € $ £
IRELAND 85% 25 YEARS €120,000 YES 5.9% €
ISRAEL 75% 15 YEARS $200,000 NO 5.25% € $ £
ITALY 80% 40 YEARS €42,000 YES 5.76% €
MALTA 90% 30 YEARS £20,000 YES 3.9% €
MONACO 90% 25 YEARS €50,000 YES 4.63% €
NEW ZEALAND 70% 30 YEARS £50,000 NO 8.2% NZ$
POLAND 70% 20 YEARS €40,000 NO 7.8% € $ £
PORTUGAL 80% 30 YEARS €25,000 YES 3.2% € $ £
SOUTH AFRICA 50% 20 YEARS Rand 500,000 NO 14.8% RAND
SPAIN 80% 40 YEARS €30,000 YES 4.24% € $ £
SWITZERLAND 60% 35 YEARS £150,000 YES 2.64% SW FRANC
TURKEY 75% 20 YEARS €25,000 YES 6.65% € $ £
USA SEE SEPARATE MATRIX FOR USA

Contact Nigel Salmon and Team on

01974 299055 / 07791 890445

info@girasolhomes.co.uk

http://exchangeratenews.blogspot.com Our Blog

Tracker mortgages are 'safe as houses' | This is Money

Tracker mortgages are 'safe as houses' | This is Money

For borrowers with good deposits there are some excellent deals.

A borrower could land a two-year tracker deal starting at 3.49% with Alliance & Leicester, part of the Spanish-owned Santander group. The deal represents a rate that tracks at 1.99 points above the base rate. There is a steep fee of one per cent of the mortgage balance and borrowers need at least 40% equity.

Girasol Homes are excited about the monies on offer and encourage would be borrowers to get in touch and ask for a Decision in Principle.

Contact girasol on 01974 299055 or email info@girasolhomes.co.uk

Cheaper mortgages as the Euribor continues to fall.

Spain Business Brief - Monday December 29 2008

Cheaper mortgages as the Euribor continues to fall.

Mortgages in Spain will see their largest fall in seven years, as the Euribor rate falls to 3.4%, its greatest fall since 2001. The change means the average mortgage will be 115 € cheaper a month. Experts say that the tendency for next year will continue to be downwards.

Girasol Homes mortgage website is still expected to be ready early January - this will not only cover Spain but worldwide including Portugal, the USA and destinations which will include the UK, Turkey and even Australian mortgages. Register now or email us for a mortgage illustration at mortgages@girasolhomes.co.uk

Full article

Cheaper mortgages as the Euribor continues to fall.

Mortgages in Spain will see their largest fall in seven years, as the Euribor rate falls to 3.4%, its greatest fall since 2001. The change means the average mortgage will be 115 € cheaper a month. Experts say that the tendency for next year will continue to be downwards.

The Prime Minister, José Luis Rodríguez Zapatero, is preparing another meeting with the Spanish banks for January, with the intention that the citizens of the country benefit from the state help being given to the financial institutions. Zapatero wants to see the funds have an effect on the real economy.

The Minimum Wage in Spain will increase by 4% in 2009 to take it to 624 € a month, compared to the 600 € now. Minimum pensions are up 6% next year.

RENFE train unions have called off the strike which was planned for today after a meeting with management.
Both sides have agreed to extend the current wage deal for another year and apply a wage increase equal to that awarded to civil servants next year.

The latest victim of the Madoff broker fraud is the Spanish film director, Pedro Almodóvar and his production company El Deseo. They invested some 5% of their assets in Lux Invest, one of the affected funds. Stephen Spielberg also lost in the fraud.

Savings Bank La Caixa has announced that it is no longer in talks to sell its shares in Repsol YPF. It was thought the bank would be selling the 14% shares it has to the Russian company Lukoil, but they announced the change of mind in a statement to the National Council for Market Values.

General Motors workers are demonstrating in Zaragoza this afternoon as they have failed to reach an agreement on redundancies with management. The motor manufacturer wants to temporarily lay off 7,500 workers for a period of 17 days.

And finally, It seems the economic crisis is affecting wine sales in Spain, with sales of crianzas and reservas in bars and restaurants down 20%. However the sales of Don Simón and other cheaper table wines, often sold in cartons, are soaring up 29%.

Full article from http://www.typicallyspanish.com/news/publish/article_19433.shtml

USA Rate cut to record lows makes Istanbul investment a top pick

US Fed chief Ben Bernanke last night cut interest rates more than expected to between 0% - 0.25%. The dollar fell back on the news against most majors. Bernanke is recognized as an expert on the 1930’s depression and has unleashed all his armour in the fight against the recession.

The much talked about “quantitative easing” a monetary policy tool used by the Japanese in the 90’s during their fight against deflation is now centre stage as interest rate setting policy at almost 0% gives the Fed no further scope to cut. The Fed are likely to flood the US with money in order to keep the economy moving. I would imagine that US government debt by way of T Bonds will be purchased by the Fed in order to print more money.


This morning see’s the release of the Bank of England MPC minutes. They are likely to show a unanimous vote in favour of the rate cut at the beginning of the month and further easing of monetary policy.

The Euro has been one the major beneficiaries overnight and dragged Sterling to a new record low as traders buy back the euro on widening interest rate yield differentials. This is profit taking for Christmas bonuses in my opinion.



For property investors or for investors generally the pick of the crop are the Istanbul 5 year rental properties available from £62,950 with a 5 year rent guarantee at 9.5% see http://istanbulinvestmentproperty.blogspot.com/

Current interbank prices area as follows:


GBPEUR: 1.1060

GBPUSD: 1.5623

GBPDKK: 8.2130

GBPSEK: 12.2450

GBPCHF: 1.7375

GBPZAR: 15.5485

GBPJPY: 138.14

USDEUR: 0.7069

GBPAUD: 2.2434

GBPNZD: 2.6739

GBPCAD:
1. 8703

Exchange Rate Update for Overseas Property Buyers

Foreign Exchange Morning Market Commentary

US unemployment numbers showed a massive jump, way ahead of expectation in the non-farm payrolls. 533,000 were added to the claimant counts against an expected 320,000 and confirmed that recession in the US is well and truly entrenched. On the back of the that, nations that rely on exports such as China, Japan, Germany and the UK are looking more pessimistic.

The massive injections of cash liquidity and monetary easing by global central banks are likely to feed through to the real economy in the spring of 2009. In the meantime it is likely that the UK economy will continue to deteriorate. There is very little economic data out this week from the UK with just retail sales and UK trade numbers released tomorrow.

Current interbank prices as follows:

GBPEUR: 1.1590

GBPUSD: 1.4935

GBPDKK: 8.6250

GBPSEK: 12.1460

GBPCHF: 1.8078

GBPZAR: 15.2166

GBPJPY: 139.75

USDEUR: 0.7759

GBPAUD: 2.2530

GBPNZD: 2.7507

GBPCAD: 1.8722

My thanks to Bruce Borrie for this information.

Visit http://spanishpropertybargains.blogspot.com for excellent property opportunities in Spain.

DECEMBER MORTGAGE DEALS

SPANISH MORTGAGE DEALS DECEMBER 2008

UP TO 100% OF PURCHASE PRICE (MAX. 70% OF VALUATION)
MINIMUM PROPERTY VALUE €350,000. IDEAL FOR DISCOUNTED PURCHASES


INTEREST ONLY AVAILABLE UP TO 40 YEARS
IDEAL FOR THOSE CLIENTS WISHING TO KEEP THEIR MONTHLY PAYMENTS DOWN LONG TERM


FIXED RATE MORTGAGES FROM 2 – 25 YEARS
IDEAL FOR CLIENTS WISHING TO BUDGET WITH CONFIDENCE


FOREIGN CURRENCY MORTGAGE - RATES FROM 1.93% (MAX 60%)
LOWEST RATES IN THE MARKET


LIFETIME MORTGAGE
FOR RETIRED CLIENTS WHO WISH TO MAKE NO MONTHLY PAYMENTS!


CASHBACK MORTGAGE - FIRST OF ITS TYPE IN SPAIN
IDEAL FOR THOSE REQUIRING ASSISTANCE TOWARDS FEES/FURNISHINGS


UP TO 80% OF CONTRACT PRICE
AVAILABLE FOR NON RESIDENTS LOOKING FOR LOW DEPOSIT SCHEME


BUY TO LET PORTFOLIO MORTGAGE – MAX 60% OF CONTRACT
IDEAL FOR INVESTORS


http://www.girasolhomes.com/ourservices.php

Mortgage Rates Slashed by Abbey, Barclays and Woolwich on 100 Mortgages

Mortgage Rates Slashed by Abbey, Barclays and Woolwich on 100 Mortgages

Interesting news as the money is finally getting through to the people who require it, I personally think that one of the banks will break rank and make a killing by being the first. Some foreign banks are already starting to try and make a move and cherry pick the best clients from a large pile.

It should be interesting.

We have just launched a Foreign Currency Mortgage with rates from 1.63% in either dollars, yen or swiss francs.

Girasol Homes Mortgage Site should be launched 3rd December 2008.

Pre register for news of our sites launch by emailing us at mortgages@girasolhomes.co.uk