International mortgage broker Lowell Finance published the analytical report "Mortgage lending in Europe. Results of 2010 "which provides information on the conditions of mortgage lending in 7 European countries. The report presents the conditions and possibilities, and limitations, and general recommendations concerning the credit for non-EU residents in 2010. Action-oriented material is the focus on lending terms for buyers from Russia and CIS countries.
According to the study, in 2010, credit markets in most key countries were restored after a major upheaval in 2009. 1 st half of 2010 was described as the reconstruction phase of growth of mortgage lending in key global markets. The main drivers of growth throughout the year served as the global economic recovery and global real estate markets, as well as increasing the stability of credit institutions and the welfare of individual clients.
One of the most important factor in recovery of interest in lending in 2010 were the lowest interest rates on mortgage loans, backed by measures to stimulate the global economy.
In 3rd quarter 2010 mortgage rates in France have reached the minimum values since the Second World War, similar situation in other European countries: UK, Switzerland, Italy, which was a major factor in growth in mortgage lending, and provide appropriate support to the property market.
Demand for facilities overseas property in 2010 among Russian buyers began to recover, with major purchases are made on the favorable situation on the European real estate markets, due to the previously pent-up demand, and wealth of buyers from Russia. In this case, changing preferences and goals of purchase. Analyzing the motivations for buying and interest in overseas property with mortgage in 2010 among customers Lowell Finance are the following trends:
- 58% of buyers did not consider the purchase as an investment, and planned to use the property for family vacation and residence,
- 24% considered the purchased property solely as investments in this category commercial real estate, buy to let properties,
- 18% of buyers consider the object of purchase as a place for vacation and as an investment in this category in most cases, buy to let residential property
Most of the Russian buyers of European real estate said property investments abroad tool for ensuring the protection of investments, but only 24% of customers said that the acquired property as an investment. In most cases, property was purchased as a vacation and permanent residence with the possibility of preservation of capital outside of Russia.
In 2011, the Europe-wide trend to continue reducing costs in the euro area, and will remain uncertainty associated with a public debt of Spain, Portugal, Italy and other European countries. Against this background, growth in mortgage lending will continue at the most stable of European real estate markets, thanks to low interest rates that will support real estate markets. Active growth of real estate markets and opportunities for mortgage lending is constrained by the presence of unresolved financial problems among European banks, the complexities of European financial markets.
Along with the growth of major economies of the EU, and rising inflation, should expect an increase in interest rates, the ECB and the Bank of England, which could lead to an increase in mortgage interest rates in Europe compared to the year 2010, an average of 1-1,5%. Raising rates will adversely affect the pace of credit growth, and may be one of the causes of the decline in demand for European real estate markets, namely UK, France, Germany, Switzerland and also to become a driver for further correction in real estate markets of Spain, Portugal, Greece and some other countries.
