The local market there is something of an enigma for a number of reasons:
- Genuine land shortage
- Lots of relocating staff for gaming/banking/insurance/shipping industries
- Full employment, in fact greater than 100% - 18,485 out of a population of 30,000, with many thousands commuting from Spain everyday
- Gibraltar address required in order to send children to school there or own a Gib-registered vehicle
- Property required in order to qualify for High Net Worth status
- 10% yield on rental properties
- Very low crime levels
- Vastly over-priced in relation to average salaries....approx £19K
- Living in Spain a far superior lifestyle
- Crossing the border has become easier
- Rents jaw-droppingly low, 20-30 miles further up the coast in Duquesa, Manilva etc
- Recent budget changes have removed tax incentives for owning properties...new flat rate tax with no allowances
- Much smaller properties compared to Spain
Previously, flats were purchased specifically to offset income tax. Allowances were deducatable against mortgage interest & insurance/endowment premiums. The new system has slashed tax bills for middle to high earners.
Added into the mix, the recent credit crunch, I noticed today in the local paper that, prospective buyers were facing mortgage refusals by local lender Barclays due to affordability issues (now where have we heard that before )
.....On the report that a number of purchasers are experiencing difficulties with their bridging loans Barclays states that it is addressing all applications for facilities, be they bridging facilities or mortgages, with due care and attention to affordability.
“The general public and Regulators would expect this from a responsible lender such as Barclays Bank. Regrettably, as is the case in all borrowing requests, and prospective purchasers of these properties are no exception, a relatively small number will not be able to meet the reasonable and prudent requirements we apply to ensure borrowers can afford what they wish to borrow,” said the bank.
“In the report, it was mentioned that the Government are looking to other lenders to offer facilities. In other words, Barclays Bank is the only Bank currently offering facilities to these prospective purchasers.”.....
Edited by jaseywasey, 19 October 2007 - 04:29 PM.