EU to inspect urban policies in the Costa Blanca

The Benidorm and Costa Blanca Association of Hotel Owners (Hosbec), and the Association of Property Developers and Urban Planners are meeting today to discuss the visit by a delegation from the European Parliament which will inspect urban policy in the Communidad Valenciana. This is the second visit made by EP delegates investigating the constitutionality of the controversial Valencian land laws. However Hosbec claims that the inspection forms part of a continuing campaign against tourism in the region (a claim which property owners adversly affected by the LRAU could find quite offensive). The European delegation, led by Marcin Libicki, will begin by meeting property owners affected by the LRAU land laws in Orihuela.

Tomorrow the delegation will visit Torrevieja, Rojales, Catral, Tibi, Parcent and Benissa, where it will meet more owners whose properties have been affected by the LRAU. On Friday the delegation will visit Xábia and Valencia, where it will meet Esteban González Pons, a Local Government councillor in charge of urban development and member of the ruling PP Valencian government, who has spoken out publicly against the visit.

Hosbec has accused the visit of damaging the economic and social interests of the Communidad Valenciana and diminishing tourism in the province. It also views the visit as part of a campaign by certain political groups against tourism in the Communidad Valenciana and blames the Socialist Executive.

The Association for Property Developers together with Urban planners has complained of having requested a meeting with the delegation but receiving no reply. They also question the fact that the EU has sent politicians instead of technicians if the question over LRAU was technical. The Association's legal representative has gone as far as claiming that the legislation protecting property owners in the Valencian Region actually goes too far in recognising too many rights and so affected free competition.

In the face of so much opposition from hoteliers and property developers, it will be interesting to see how the visit unfolds and if the delegates are successful in persuading the European Parliament to put further pressure on the Regional Government in Valencia to change the LRAU Law.

Related:
Valencian Land Laws unconstitutional according to the European Commission

Spanish mortgages can provide income

Old age pensioners in Spain receive monthly payments from banks against the value of their homes

Some banks in Spain run a scheme under which old age pensioners who are home owners can receive loans from banks in the form of monthly payments of around 500 euros, either during a limited number years or for life. This way pensioners can top up their monthly pension. The banks can then be repaid either by the pensioner, which would leave the home free of debts, or the inheritors of the home.

This scheme which is only run by a few banks is called a ‘hipoteca inversa’ in Spanish which literally translated means an ‘a mortgage the other way round’. The loan is given with a fixed interest of around 6%.

Miguel Artazos, Manager of the Development of Financial Products for Ibercaja, explained in an interview in El Pais that this product converts a property into a financial support for those pensioners who have a limited income and find it hard to get by on their normal monthly pension. He also said that it was a way that pensioners could receive extra income without having to give up their properties.

He said that once the fixed term was up their were two options. The first is that if the property owner dies the inheritors decide to keep the property and pay off the loan in full. The second option is to sell the property, pay off the loan and keep the remaining money.

Following a fixed term the payments can then be extended for life. However this would incur extra costs in the form of an added insurance plan which could be as much as 18,000 euros extra.

Whether the payments are made for a fixed term or for life there are a number of other costs to be taken into account when considering this option like notary costs, a survey and valuation of the home, opening commission etc.

At present only a few banks offer this scheme and their terms and conditions vary widely. The Spanish Minister for the Economy, Pedro Solbes, is looking into regulating ‘inverse mortgages’ by law. The main objective would be to offer greater security to the person taking out such a loan with the bank and offer more transparency.

The government is also looking at how to reduce the cost of ‘inverse mortgages’ for consumers. For example no penalty charges for the cancellation of such a loan. In addition, the government is also considering whether to make the costs of opening this type of loan tax deductible.

Related:
Mortgages in Spain
Spanish banks
Spanish savings banks

Rented student flats in Spain

‘Mini flats’ for students available from 2009

María Antonia Trujillo, Spain's Housing Minister, has announced that under the Government’s housing programme, up to 10,000 student ‘mini flats’ will be built on university campus’s all over Spain.

The Vice president, María Teresa Fernández de la Vega, recognised that 80% of rented housing was rented out to young people. It is estimated that there are approximately 1.2 million University students in Spain out of which between 20 and 30% live away from home, mostly in shared student flats or residences.

The government-subsidised student flats will measure between 30 and 45 square metres and consist of one or two bedrooms with a communal living area. They will cost between 75 to 200 euros per month depending on the city and type of flat and the government intends to invest 300 million euros in the construction of up to 10,000 flats under on land owned by universities.

According to the Spanish housing minister, the programme, which forms part of the Spanish Government Housing Programme, is designed to help the mobility of students and encourage more equality of opportunity.

The mini-flats will be available to rent for up to five years in rotation and will be managed by each university. Madrid's Carlos III University will be one of the first to have mini flats available to rent - at present it is awaiting approval to start constructing its first mini flats.