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[grupo guitarlumber] 04/11/2006 09:05

The Times November 04, 2006


Six Arab states join rush to go nuclear
By Richard Beeston, Diplomatic Editor

Algeria, Egypt, Morocco, Tunisia, UAE and Saudi Arabia seek atom technology


THE SPECTRE of a nuclear race in the Middle East was raised yesterday when six Arab states announced that they were embarking on programmes to master atomic technology.



The move, which follows the failure by the West to curb Iran's controversial nuclear programme, could see a rapid spread of nuclear reactors in one of the world's most unstable regions, stretching from the Gulf to the Levant and into North Africa.

The countries involved were named by the International Atomic Energy Agency (IAEA) as Algeria, Egypt, Morocco and Saudi Arabia. Tunisia and the UAE have also shown interest.

All want to build civilian nuclear energy programmes, as they are permitted to under international law. But the sudden rush to nuclear power has raised suspicions that the real intention is to acquire nuclear technology which could be used for the first Arab atomic bomb.

"Some Middle East states, including Egypt, Morocco, Algeria and Saudi Arabia, have shown initial interest [in using] nuclear power primarily for desalination purposes," Tomihiro Taniguch, the deputy director-general of the IAEA, told the business weekly Middle East Economic Digest. He said that they had held preliminary discussions with the governments and that the IAEA's technical advisory programme would be offered to them to help with studies into creating power plants.

Mark Fitzpatrick, an expert on nuclear proliferation at the International Institute for Strategic Studies, said that it was clear that the sudden drive for nuclear expertise was to provide the Arabs with a "security hedge".

"If Iran was not on the path to a nuclear weapons capability you would probably not see this sudden rush [in the Arab world]," he said.

The announcement by the six nations is a stunning reversal of policy in the Arab world, which had until recently been pressing for a nuclear free Middle East, where only Israel has nuclear weapons.

Egypt and other North African states can argue with some justification that they need cheap, safe energy for their expanding economies and growing populations at a time of high oil prices.

The case will be much harder for Saudi Arabia, which sits on the world's largest oil reserves. Earlier this year Prince Saud al-Faisal, the Foreign Minister, told The Times that his country opposed the spread of nuclear power and weapons in the Arab world.

Since then, however, the Iranians have accelerated their nuclear power and enrichment programmes.

[grupo guitarlumber] 03/11/2006 07:29

Maroc Telecom Third-Quarter Sales Rise 12% on Mobile Clients

By Rudy Ruitenberg

Nov. 3 (Bloomberg) -- Maroc Telecom, Morocco's former telephone monopoly, said third-quarter sales rose 12 percent as the company added subscribers for its mobile-phone and Internet services.

Revenue increased to 6.19 billion dirhams ($714 million) from 5.53 billion dirhams a year earlier, Rabat-based Maroc Telecom said in a statement published in La Tribune newspaper today. Vivendi SA owns a 51 percent stake in the company.

Maroc Telecom today confirmed its full-year targets. In September the company lifted its outlook for 2006 profit growth after adding wireless and Internet clients. Africa is the world's fastest-growing cellular-phone market, according to the Geneva- based International Telecommunications Union.

In September the company said full-year operating profit will rise more than 14 percent, up from a previous prediction of 12 percent to 14 percent growth. The company had already raised its outlook for 2006 sales growth in July to more than 8 percent from a range of 6 percent to 8 percent.

Second-quarter revenue at Maroc Telecom climbed 11 percent to 5.6 billion dirhams, the company reported in July.

Between 2000 and 2005, the number of mobile-phone users in Morocco increased an average 40 percent a year, compared with a worldwide growth rate of about 24 percent, according to the ITU.

The Moroccan government sold shares in Maroc Telecom in an initial public offering in December 2004, after Paris-based Vivendi Universal agreed to lift its stake to 51 percent.

To contact the reporter on this story: Rudy Ruitenberg in Paris at [e-mail] .

Last Updated: November 3, 2006 00:59 EST

[waldron] 24/10/2006 18:43

London's Prime Home Gains May Halve in 2007, Knight Frank Says

By Peter Woodifield

Oct. 24 (Bloomberg) -- The rise in the cost of London's most expensive apartments and houses may halve next year as the growth in European property prices slows, international real estate advisers Knight Frank LLC said.

The price of homes in London costing over 5 million pounds ($9.4 million) will gain 12 percent in 2007 compared with 25 percent this year, London-based Knight Frank said in an e-mailed report published today. U.K. prices will rise 6 percent next year, down from 9 percent in 2006, said Knight Frank.

``This year's bonus round for bankers, traders and fund managers may be the key,'' Liam Bailey, head of residential research at Knight Frank, said in an interview. ``That is the main driver for prime property prices.''

Bonuses paid to employees of London-based financial firms may rise at least 8 percent from 2005's record 7.5 billion pounds, the Centre for Economics and Business Research said last month. Demand, coupled with a shortage of properties for sale, has resulted in prime London prices rising at their fastest rate since 1997.

The biggest gains next year in the U.K. outside the prime London market will be in Northern Ireland and Scotland, which have also been the best performers this year, said Knight Frank. There will also be an impact on prime regional markets close to London as cash-rich London-based buyers compete with locals for the best properties, said Knight Frank.

Prices across Europe will slow in 2007 as the impact of higher interest rates makes homes less affordable. The biggest gains will be in countries in eastern Europe that joined the European Union at the start of 2004, said Knight Frank.

Advance

``We are upbeat about prospects in 2007,'' said Bailey. ``With no obvious major international shocks visible at this point in time and a continuing broadly benign economic and interest rate environment likely, we see both buyer confidence and appetite remaining firm.''

House prices in Lithuania may advance 20 percent, followed by Latvia and Slovenia where prices may gain 17.5 percent, said Bailey. Prices in Latvia gained 45 percent in the year to June 30, Knight Frank said in August.

French home price growth slowed to 9.4 percent last year from 15 percent, while Irish prices gained 9.4 percent, compared with 10.1 percent growth the previous year. In both countries prices are set to rise 7.5 percent next year.

The one European country where prices are set to accelerate is Germany, said Bailey. Property prices in Europe's largest economy may advance 2.5 percent in 2007. That compares with 0.5 percent in the year to June 30. Germany has one of the lowest rates of home ownership in Europe at 43 percent and prices fell in 2004 and 2005, according to the European Central Bank.

To contact the reporter for this story: Peter Woodifield in Edinburgh at [e-mail]

Last Updated: October 23, 2006 19:44 EDT

[waldron] 06/10/2006 07:50

Associated Press
Morocco Ruling Region With Gentler Hand
By GEORGE GEDDA , 10.06.2006, 02:05 AM



It came as something as a surprise to Aminatou Haidar when Moroccan authorities finally relented and filled her request for a passport. They had kept her waiting 17 years.

Haidar is from Western Sahara, a bone-dry territory on Africa's northwest coast that is slightly smaller than Italy. Morocco claims sovereignty over the largely unpopulated area. Haidar sees the Moroccans as occupiers, and has paid for her anti-Moroccan activism with lengthy imprisonments.

The struggle over Western Sahara has gone on with scant international notice. Moroccan authorities have not been accustomed to allowing partisans such as Haidar to go abroad. But that is now changing and Haidar, armed with her passport, has been telling the story of the Saharawi people, as Western Saharans are known, in Europe and the United States.

"I was in a secret prison for three years and seven months," Haidar said in a recent interview here, alluding to her 1987-91 incarceration. "We never went before a judge. We had no communication with the rest of the world. Our families did not have any news about our whereabouts."

"For all this time I was blindfolded. They only took it off four days before my release. The first three weeks it was a nonstop interrogation and beating. We had nothing. We just slept on the bare floor with a small blanket. We had no right to showers. There were all kinds of parasites."

Haidar was imprisoned for her activism a second time in June 2005. She said she was confined to an isolation cell without fresh air or light, her head injuries untreated. In some ways, though, her imprisonment was more humane than the first time. "My family at least knew where I was, and could visit me," she said. "I wasn't blindfolded and at least I was taken before a judge."

Haidar was released from prison last January, after seven months. Her subsequent receipt of a passport, obtained with an assist from Amnesty International, reflected a more tolerant attitude of King Mohammed VI and his government toward Western Saharan dissidents.

Haidar, 39, sat for the interview dressed in a flowing gown typical of her region. She smiled often and showed little bitterness about her ordeal. Between stints in prison, she earned a degree in modern literature and had two children, who are now ages 10 and 12.

"I go wherever I can to explain the violation of human rights in Western Sahara," she said. "The leading power is the United States. I can't go to other places without coming to the U.S. to explain."

Morocco, citing historical claims, assumed control of the Western Sahara after Spanish rule ended in 1975. Polisario Front rebels, a pro-independence group backed by Cuba, fought a 12-year guerrilla war against forces loyal to the monarchy. The United Nations brokered a truce in 1991, but the continued presence of Polisario militants at camps in neighboring Algeria makes clear that the conflict persists.

Morocco recognizes that change in the region is needed. It wants to grant autonomy to the territory, with an elected governor and legislature but with Rabat retaining strict sovereignty. A transition plan is being drawn up by a special advisory council known as Corcas.

The secretary general of the council, Khalli Henna Ould Errachid, a native Western Saharan loyal to Rabat, led a delegation here last week to explain the plan to senior Bush administration officials. In an interview, he said peaceful dissidents in Western Sahara no longer need fear reprisals.

Haidar's freedom to travel internationally and to return home, he added, offer "proof that Morocco respects human rights." Moroccan Ambassador Aziz Mekaour said Haidar's presence in the United States "is just one small example of how things have changed."

Moroccans now boast a lively press, a vibrant civil society and women freed from constraints common in other Arab societies. Moroccans also have held relatively free municipal and parliamentary elections.

But there will be no elections in Western Sahara's to decide its future status. Rabat says the territory will forever be Moroccan.

[waldron] 01/10/2006 07:19

Sun-hungry Brits are retiring abroad

Published: 07:00 Sunday 01 October 2006
By Lorna Bourke, Money Columnist

It could be the weather or the thought of Gordon Brown as Prime Minister but according to NatWest an estimated nine million Brits are contemplating retiring abroad.

Over five million individuals dislike their UK lifestyle, 55% would consider buying a holiday home abroad with their pension pot, if they could, and of those who already have a home in Spain 68% spend a quarter of the year abroad.

One in three current and potential overseas homeowners intend to retire abroad (32%), but it is the 30 to 50 year olds with the greatest desire to take flight. Three quarters (72%) said they would consider leaving the UK permanently.

The over-50s demonstrate they are creatures of habit showing more reluctance to leave their British lives behind them, but half (51%) still intend to move abroad.

'It is evident from our research that many Brits intend to escape the hectic British lifestyle to enjoy a more relaxed standard of living overseas,' commented Mike Freer, head of business development at NatWest International.

'As the days get shorter and temperatures drop, now is the time when many dream of a life abroad. Surprisingly however, it's the 'middle-agers' most keen to make the move, perhaps prompted by demanding jobs and continuous warnings to plan for the future.'

Some 31% of those polled want to buy a place in the sun. Turning this into reality has become a genuine option for many. Despite assumptions to the contrary, holiday homes are affordable for many people. Half (51%) of those surveyed with homes abroad, paid less than £100,000 for their property and three quarters (74%) paid £300,000 or less.

Spain remains the most popular holiday home hot spot with half of potential overseas property purchasers saying they would choose a Spanish location.

Here, holiday homes are even more affordable than the average overseas property – only a fifth of Brits with Spanish homes questioned (21%), paid over £200,000 for their pad. Those with holiday homes in Spain also get a huge amount of use out of their properties - 68% of them spend at least a quarter of the year residing at their property.

'Buying a holiday home is a realistic option for many people and it needn't cost the earth,' says Freer. 'With the right advice and a favourable mortgage, overseas properties can provide a fantastic lifestyle, great investment potential and somewhere to escape the chaos of life back home! With people increasingly looking to retire overseas, buying abroad can provide a realistic and affordable option for many.'

NatWest International Personal Banking's Spanish Mortgage offers loans in Sterling and Euros specifically designed for UK nationals. One of the problems associated with buying a property abroad is the language barrier.

NatWest International staff are bilingual in Spanish and English and can offer guidance at every stage. NatWest International also provides contact with English speaking estate agents and solicitors based in Spain. For further information on the Spanish Mortgage visit: www.natwestinternational.com/spain

Meanwhile Barclays Bank has launched a website at www.barclays.co.uk/buyingabroad to offer advice for those wanting to buy in Spain, France, Italy and Portugal, including tips on finding schools for children. Barclays claims more than 80 years experience in this field and has nearly 650 branches across Italy, France, Spain and Portugal.

Overseas property purchases are seen as investments, according to new research from Barclays. Some 82% of all enquirers cited this as their reason for contacting the bank about finance, with the second most popular reason (quoted by 26% of callers) as buying a holiday home.

Research conducted by Barclays showed that 48% of British buyers of overseas property were dissatisfied with the advice provided to them by a third party, while 38% found it hard to get adequate advice from their lender.

'Buying a home is one of the most stressful experiences we face, even in one's home country,' commented Suzanne Clay, European business development manager at Barclay. 'Buying property abroad can be even more overwhelming as it often means entering into uncharted territory with limited understanding of local language, laws, customs and regulations.'

According to Barclays over 2.2 million British people own a home overseas, a figure that is set to double over the coming years. Barclays estimates that 70,000 British people buy property in Spain every year, with another 50,000 buying in France and 10,00 to 15,000 each in Italy and Portugal.

Barclays has the largest presence of any UK bank in the European non-resident mortgage market, and is the leading mortgage provider in South Africa following its acquisition of a majority state in Absa. In May this year Barclays further strengthened its international mortgage credentials when it began offering mortgages in Dubai.

[waldron] 25/9/2006 07:13

Home owners to be hit by rate rises in UK and euro zone
By Allister Heath
24 September 2006


HOMEOWNERS will be hit by another hike in interest rates this year, according to a poll of City of London economists this weekend. The Bank of England will put up interest rates by a quarter point to 5% in November, the poll from research house Ideaglobal says.

Interest rates are also expected to rise again soon in the euro zone, intensifying the pressure on the European consumers and especially the Spanish housing market.

Susana Garcia-Cervero, an economist at Deutsche Bank, said: "The Spanish housing market is one of the most pricey in the world. Even if a crash can be avoided, a cooling of the market sooner or later seems inevitable."

Spain's household debt reached all-time highs of 110% of gross domestic product (GDP) in 2005 with the mortgage market and banking system causing concern, the Deutsche Bank report warned. Mortgage debt already amounts to 85% of GDP as borrowing has been encouraged by the ability to deduct mortgage interest payments from income tax liabilities.

Almost 98% of Spanish households hold variable rate mortgages, where interest rates are adjusted every six months. With more European Central bank (ECB) interest rate hikes likely there are risks that poorer households will have difficulties paying mortgages.

Spanish house price inflation over the past few years has increased the size of outstanding mortgages, with the average loan rising by 145% between 1998 and 2006, compared to only 25% between 1990 and 1998.

The ratio of Spain's house prices to rent has jumped to an index of 186.2 in 2004 from 100 in 2000, while the corresponding ratio in the US and UK increased to 121.0 and 146.2, respectively. The surge in Spanish house prices had a significant effect on the size and composition of economic growth in recent years – and a decline could trigger decline in growth.

Since 1998, when the rise in house prices in Spain began, the share of value-added of the construction sector in nominal GDP almost doubled from 5.9% then to 11% in 2005.

The property downturn is intensifying in the US, forcing the Federal Reserve to keep interest rates on hold last week. Capital Economics is forecasting a severe 20% slump in house building. Peter Dixon, an economist at Commerzbank, said: "It will take a considerable period of time during which income has to rise strongly and an even sharper decline in US house prices, before housing is anywhere like as affordable as over the period 1993-2005."

[waldron] 18/9/2006 19:25

Risk of global house price crash falls away

Knight Frank have recently released the second quarter 2006 results of their Global House Price Index which they claim to be the first serious attempt to analyse pricing trends in residential property across the world on a standardised basis every quarter. The main finding is that global house price growth has continued to slow from the recent peak reached in 2004 and overall 18 out of the 30 countries covered have seen price growth slow over the last 12 months. Average global house prices stood 8.5% higher at the end of June 2006 compared to the same period 12 months earlier, the index shows.

Liam Bailey, Head of Knight Frank Residential Research, comments: "The most notable trend is that house price growth is continuing to slow across the globe. [...] Higher prices in most parts of the globe are a result of lower finance costs and increased wealth following strong economic growth in recent years. Slower house price growth globally suggests that affordability constraints have been hit in more locations."

However, Knight Frank does not see this as the start of a global crash in prices. Bailey said:
"Many commentators have been concerned that the boom in prices which has been seen in many countries would end in tears. When price growth began to slow in Australia and the UK, in 2003 and 2004 the belief was that this was the beginning of a house price slowdown which would influence consumer confidence, spending and economic growth."

Bailey continued: "A stable slowdown appears to have taken place in the UK and Australia with both countries sitting well down the price growth league table. [...] Our forecast is that we will see continued slowing of average global house price growth over the rest of 2006 and into 2007. However this wider trend will mask regional hot-spots and investment opportunities."

The hotspots are still out there...

The overall slow down in property growth around the globe has not been a uniform process and some markets have been rocketing ahead regardless. Knight Frank's data indicates phenomenal annualised growth rates in Latvia (45.3%), Bulgaria (20.5%) and Denmark (15.4%)

Bailey commented: "New data for Latvia reveals huge growth in prices over the past two years, with prices for apartments in Riga and the surrounding area over 45% higher in a year. Why has this market performed so well? A levelling up situation is affecting all markets in the former Eastern Bloc especially those which have joined the EU in recent years. Wage inflation, growing prosperity and access to less constrained mortgage finance have all contributed to rapidly rising prices."

Bailey continued: "The same process has been seen in Bulgaria with a classic combination of catch-up, speculation, second home interest and slow but sustained economic growth underpinning prices."

Knight Frank's current favoured locations are:

Germany Knight Frank believe that Europe's largest economy, and the world's largest exporter is still underperforming and will see sustained growth from 2007
Slovenia and Slovakia Knight Frank tip these two as the countries with the best potential for further growth in Eastern Europe
Cyprus Knight Frank believe this country has potential for growth over the medium term once the VAT changes are implemented and settle down
Russia Although Knight Frank are effectively talking about Moscow, which they believe has the potential for more growth and will eventually rival London as the most expensive world city within five years.
...Now for the bad news

Knight Frank's optimism comes at a time when the large investment bank Morgan Stanley is predicting a global slump in response to rising inflation and interest rates. According to Morgan Stanley, the recent property boom was triggered by a prolonged period of low interest rates around the globe but this trend is reversing and rates are on the rise.

Morgan Stanley economist Andy Xie said in a note: "As inflation picks up simultaneously around the world, interest rates are rising everywhere, and the property boom is turning into a bust. [...] Bonds began to decline first. Property, equity and commodities are following."

Xie continued: "A soft landing for global property is possible but not assured. [...] The seemingly soft landing in Australia and the US in the past two years has lulled investors into believing that other markets will follow the same pattern. The difference is: these markets began to soften in a strong global economy. The global economy has peaked out and could provide little support for growth engines like China and the US when their property markets turn down."

In Knight Frank's data, the slowest annualised price growth was experienced in Serbia (-5.1%), Japan (-2.7%) and Hong Kong (-2.4%). The sharpest reversal of fortune was experienced in Hong Kong moving from 22.5% growth in mid 2005 to -2.4% falls in mid 2006.

[waldron] 10/9/2006 08:46

Property: The holiday's over so let's go native

Published: 07:00 Sunday 10 September 2006
By Lorna Bourke, Money Columnist

Most people who buy a holiday home abroad hope to cover some of the costs by renting it out to holidaymakers but property specialist Assetz says investors are missing out by focusing solely on holiday lets when buying overseas.

Much more reliable returns with a lot less work can be gained by investing in properties to let to the local market, Assetz maintains.

A report from the company says: 'There is a common misconception that overseas property investment must mean holiday homes, with British investors competing fiercely over properties located close to airports, beaches and golf courses. Most of the rental income must be generated throughout the traditional holiday seasons when the properties are let to a series of holidaymakers for short periods.

'While these properties can undoubtedly generate strong returns, especially in countries with a strong tourist industry such as France, the alternative route into overseas property investment through letting to local people is usually more reliable, is a much more hands-off investment and is often overlooked.'

Assetz points out that local lets are usually considerably less hassle for the investor, as one tenant will probably stay for a year or two, perhaps longer, compared with holiday rentals, which change every one to two weeks, often with long voids in low season and a high cost of 'changeovers'.

In France the average yield from a holiday rental property is about 7% but 25% of that will be absorbed by costs leaving a net yield of 5.25%. The average holiday rental property lets for no more than 10 to 12 weeks a year and the high cost of heating makes it uneconomic to attempt winter rentals except in ski resorts.

By comparison, Assetz quotes the average net yield on a fully managed long-term let, net of management charges is 5% – slightly less but much less hassle. In Cyprus the net yield on holiday lets after charges is 6% but as high as 7% for long-term rentals.

Assetz says property in city centres such as Saint-Brieuc in Brittany, Montpellier in the Languedoc or Limassol in Cyprus, is usually less expensive than in tourist hotspots, meaning investors can access better quality property at lower prices.

Stuart Law, managing director of Assetz, says: 'Amateur investors in particular are driven by the desire to holiday in their overseas property once or twice a year, therefore focus on holiday destinations, which they might ultimately choose to retire to.

'With the time taken to manage the holiday bookings and the hassle of arranging changeover cleans between clients, it would make sense financially to consider separating the investment from any intentions for personal use and seek local let property,' Law advised.

Assetz - www.assetz.co.uk
Tel: [phone].

[reidmat] 18/8/2006 18:36

Just look at this, it works:

[waldron] 15/8/2006 13:45

Brits fuel global property boom
Chris Brooke, Daily Mail
14 August 2006

British bargain hunters are fuelling a boom in house prices around the world.



GO EAST!: House prices in Tallinn, the captial of Estonia, have risen 13% in a year


With relatively few bargains to be found here, tens of thousands are looking abroad to invest in a cheap holiday home or an idyllic spot for retirement, according to a report yesterday.

Traditional European hotspots such as France and Spain are not as popular as they were in the 90s, when a continental bolthole was still something of a novelty.

These days the boom nations for housing demand can be found mostly in Eastern Europe and Scandinavia.

With cheaper air travel bringing more distant destinations within easier reach, there is also a growing demand for second homes in countries such as South Africa and Canada.

A survey of international house price inflation shows the countries where high demand has caused a sudden surge in property prices.

Latvia, a new member of the European Union, tops the league with a staggering annual property inflation rate of 45.3%.

Bulgaria is in second place, with house prices increasing by 20.5% a year. Denmark comes third at 15.4% , followed closely by Belgium with a rise of 14.9% , South Africa on 14.3% and Estonia - another new EU member - on 12.9%.

The 30-nation league table, published by estate agents Knight Frank, focuses on places where Britons are likely to buy property. Liam Bailey, the firm's research chief, said the results indicate how the market for holiday homes is changing.

'Jet-to-let is the new buy-to-let,' he said. 'People want a holiday home but they regard it as an investment, too. Find yourself a place overseas before it has a step change and hugely appreciates and you've got a bargain.'

One British buyer, who spotted the potential of the Latvian capital Riga, bought a two-bedroom apartment in the city for £35,000 in 2003 and has seen its value more than double since.


Tourism is now Latvia's biggest industry, with more than 1.5million people visiting Riga a year. The historic 13th century capital has stunning narrow cobbled streets and ornate buildings. Thousands of young Britons are also drawn there for stag and hen weekends because alcohol is so cheap.

Mr Bailey added: 'It's a levelling up that's affecting all markets in the former Eastern Bloc. Wage inflation, growing prosperity and easier access to mortgages have all contributed to rapidly rising prices.'

The UK, where house prices have already gone through the roof, is in a lowly 22nd position on the index, while Germany - Europe's largest economy - is in 27th place with virtually stagnant house prices.

Some experts believe Germany could become the next hotspot, however. 'We expect sustained growth in 2007,' said Mr Bailey.

More than two million Britons are said to own a home abroad already, a figure research suggests is likely to double. With house prices at home at record levels, many buy property abroad to let out and make money.

Thousands also have an eye on their retirement years when deciding to buy a property overseas. Government figures show a million British pensioners now draw their state pensions abroad - 241,000 in Australia, 151,000 in Canada, 71,000 in France and 32,000 in Italy.

[grupo guitarlumber] 09/8/2006 10:00

Owning a property abroad can be taxing

Press room
Foreign companies spend six times as much money on feast of UK assets than UK businesses invest abroad

Press Releases Search


8 August 2006
With the holiday season well under way, many people will be tempted to join the growing numbers of British people who own property abroad. However business and financial advisers Grant Thornton are urging buyers to be fully aware of the different tax regimes abroad, before deciding where to buy.
Latest Government figures show there are 257,000 households with second homes abroad, The most popular place for Britons to buy is Spain, ahead of France, Portugal and Italy. The US is also a popular destination, with many also tempted off the beaten track locations such as Bulgaria. However, where you decide to buy could have a serious impact on your finances.

Justin Rix, tax specialist at Grant Thornton, explains: "While good weather, availability of low cost flights and the cost of property are the biggest factors when making the choice of where to buy, the local tax implications should also be carefully considered, as these can have a significant impact on the costs associated with the holiday home."

"If you do buy a property abroad, income received from the rental of the property may give rise to local taxes. In many countries any gain arising on the sale of the property or merely its ownership can lead to a tax liability. Furthermore, if the owner of the overseas property is a UK tax resident rental income or gain on the sale of the property may also result in a UK tax liability, with the individual having to obtain relief under the complex 'double tax relief' provisions. This is on top of all the property taxes associated with purchasing property."

Tax on rental income
Rix commented, "The attraction for many who buy a second property abroad, is the income they can gain from renting the property. However the rates at which this income is taxed vary from a low 15% in Bulgaria, to 43%, for higher rate tax-payers in Italy. This tax will generally be applied to the rental income received after deducting allowable expenses, for example loan interest or agents fees, however in some countries the tax is figured on gross rents."

Wealth tax
This is effectively an annual tax on an individual's wealth, based on the value of their assets. Typically this will only be levied where an individual's assets exceed a certain amount ( e.g. €750,000 in France) and for non residents of that country will only apply on certain assets physically located in that country. Again rules vary from country to country, and many places, such as the UK, do not levy wealth tax. However, it could be a nasty surprise for the unprepared buyer of a second property.

Capital gains tax (CGT)
CGT may be levied on a sale of a holiday home or investment property, typically this will be based on the amount that the property has gained in value since purchase. Rix added, "CGT when selling a property may be a shock to some if the property has strongly increased in value. Individuals will also need to be mindful of the effect that fluctuating exchange rates can have, especially in countries with a less stable currency. For example, a loss on the sale of the property in local currency could actually turn into a profit for UK tax purposes, if the exchange rates varied enough between purchase and sale."

Inheritance tax (IHT)
Rix commented, "IHT varies widely across different countries, and careful consideration of the interaction between the UK and overseas regimes is required. In the UK a will can be written to dispose of assets as desired (subject to any challenge), however, in most of Europe forced heirship rules limit the scope to divest of any assets. It is therefore essential to take tax and legal advice before purchasing a property and to write a will in the country the asset is situated."

Those with second marriages may find it particularly difficult to combine the best tax options with passing on assets in the way they desire. Owning property abroad can also lead to problems on death as foreign probate may be needed before the assets can be dealt with.

Interaction with UK taxes
Rental income received on an overseas property or a gain realised on its sale may also give rise to UK tax consequences. Where this is the case, relief will be available in the UK for taxes paid in the overseas country. The provisions for obtaining this relief are rather complicated, but generally will result in the individual suffering taxes at the higher of the UK or overseas rates.

Principal Property Relief (PPR)
Those who buy a second home can choose to elect one of the properties as their principal private residence (PPR). Most choose their UK home, and have an opportunity at a later date to elect their holiday home, obtaining a capital gains exemption for the period since it was the elected - as well as the last three years of ownership, whether or not it is let out during that period. Mike Warburton, senior tax partner at Grant Thornton comments: "You may assume that there would be a disadvantage in electing for your holiday home to be your PPR because it limits PPR relief on your main house. As it happens, the period that you need the election on the second property to run can be very short indeed. The Revenue manuals give an example where the period is one week."

A common problem
While the tax regimes vary between countries, one concern for UK offshore property owners is the increased scrutiny from HM Revenue and Customs (HMRC) on anyone who has an offshore bank account. A recent court decision means that HMRC can obtain details about who has an overseas account directly from banks.

Rix comments: "For individuals with property abroad, it often makes sense to have a bank account overseas to pay utility bills and other such costs. It is important to ensure that any interest income received in the overseas account is properly disclosed on the UK tax return. This is also true for any rental income or capital gains arising on overseas property."

The source of the funds used to buy the property or open the investment account may also be the subject of attention from the UK taxman. Rix adds: "Information is also routinely and increasingly exchanged between Revenue authorities in different countries- the world has become a much smaller place for financial transactions."

Preparation
Rix concludes: "People who are considering taking the plunge should seek specialist tax advice both in the country in which they intend to buy and in the UK - otherwise it could end up costing them much more than they bargained for. Once a property has been purchased, they should make sure their will is updated, and in certain circumstances, it would be wise to have a will in the country where the property is located."

[grupo guitarlumber] 25/7/2006 10:14

A helping hand for Spanish home-buying

As Britons look for their ideal home across the villages, towns and cities of Spain, ranging from Abalario to Zurgena, it is easy to get lost in Spanish 'home buying' words and phrases.

With jargon ranging from Salon, Puerta, Atico, Impuesto, Notario, a lack of understanding of key terminology can not only be frustrating, but can also cloud your judgement.

But, rest assured, help is at hand. Banco Halifax Hispania, the Spanish arm of Halifax, carries out all dealings in Spain in English.

In addition, there is also a UK based, specialist customer service team for those customers who want to arrange their Spanish finance before they leave the UK.

This also means international telephone charges can be avoided and all paperwork, if preferred, can be handled in the UK.

Ian Smith, head of European Operations at Halifax plc, said: "When buying a property in Spain, it is important to work with a bank that has the ability to deal with its customers in English.

"This means that any procedural differences and jargon can be explained and therefore that the purchaser has clarity on all the issues and stages involved in the house buying process."

[ariane] 26/6/2006 08:10

Moscow Replaces Tokyo as the World's Priciest City (Update1)
June 26 (Bloomberg) -- Moscow and Seoul leapfrogged Tokyo to become the world's most expensive cities, a survey by Mercer Human Resource Consulting showed. Tokyo, which ranked first in the past two years, dropped to third place.

Moscow jumped to first place this year from fourth in 2005 as the costs of accommodation surged. Seoul rose to second from fifth, while Asuncion, the capital of Paraguay, remained the cheapest city to live in, the survey said. New York was the highest-placed U.S. city, rising three places to 10th.

``It can now be more expensive to send employees to work in Russia and Korea than places like Japan or Switzerland, which are often perceived to be more costly,'' Rebecca Powers, a senior consultant at Mercer, said in an e-mailed statement.

The survey, conducted by New York-based Mercer in March, measures the costs of more than 200 items in 144 cities. Companies and governments use the information to gauge the purchasing power of employees transferred abroad.

A cup of coffee plus service costs the equivalent of $3.07 in Moscow and $2.94 in Seoul, compared with $2.26 in New York and $1.90 in London, the survey showed. A music CD costs an average $13.29 in Moscow, while in New York it costs $10.77.

``The euro has weakened against a number of currencies, reducing the cost of living for expatriates in many European countries,'' Mercer senior researcher Anna Krotova said. The euro dropped 9.6 percent against the dollar from March 1, 2005, to March 1 this year.

Using New York as the base cost of living, the survey also compared rent prices. Rent, on average, for a luxury, two-bedroom unfurnished apartment in Tokyo is $2,352 a month, compared with $1,999 in New York and $1,700 in London.

Chicago, San Francisco

Four Asian cities are in the top 10, with Seoul in second place, Tokyo third, Hong Kong fourth and Osaka sixth. Beijing is 14th, Singapore ranked 17th and Shanghai is in 20th place.

``Chinese cities have moved up slightly in the rankings as the value of the yuan renminbi is now pegged to a number of currencies rather than just the U.S. dollar,'' Krotova said.

Other U.S. cities ranked include Los Angeles, in 29th place, San Francisco, at 34, Chicago, in 38th position, and Washington DC, ranked 83rd. Winston Salem remains the cheapest U.S. city, rated at 124th.

The following is a table of the top 20 cities in the Mercer Human Resource Consulting Cost of Living Survey. Mercer is a unit of Marsh & McLennan Cos.




March 2006 March 2005
1. Moscow 1. Tokyo
2. Seoul 2. Osaka
3. Tokyo 3. London
4. Hong Kong 4. Moscow
5. London 5. Seoul
6. Osaka 6. Geneva
7. Geneva 7. Zurich
8. Copenhagen 8. Copenhagen
9. Zurich 9. Hong Kong
10. = Oslo 10. Oslo
10. = New York City 11. Milan
12. St. Petersburg 12. Paris
13. Milan 13. = New York City
14. Beijing 13. = Dublin
15. = Istanbul 15. St. Petersburg
15. = Paris 16. Vienna
17. Singapore 17. Rome
18. Dublin 18. Stockholm
19. Sydney 19. Beijing
20. Shanghai 20. Sydney


To contact the reporter on this story:
Aaron Pan in London at [e-mail].

[ariane] 19/6/2006 18:29

Holiday home IHT snag
WE are looking to buy a second home in Spain. Would it be a good idea to put the property in our children's names as a method of reducing our future inheritance tax liabilities? BS, Kent

Peter Miller, financial adviser with accountancy group UHY Hacker Young, replies: Were you to buy a second home in Spain and simply put it into your children's names it may well be ineffective as a method of reducing your potential inheritance tax liability.

Putting the property in your children's names would be considered a potentially exempt transfer (Pet). The property would then belong to your children. If this change in ownership was to be effective for inheritance tax planning purposes then you would only be allowed to use the property if you paid a commercial rent to the owners - your children - to do so. If you did this then the value of the property would fall outside your estate after seven years.


I understand however that you plan to use the property as a second home. In order to be effective from an IHT planning perspective there must be no benefits retained by those making the gift, either at the outset or in the future.

Should a benefit be retained then the transfer would be considered a 'gift with reservation' and the Pet would fail. Consequently, on death the value of the property would be treated as remaining part of your estate and taxed accordingly.

[ariane] 19/6/2006 06:51

Bank headed off property crash, says OECD
By Edmund Conway (Filed: 19/06/2006)



Homeowners can breathe a sigh of relief - the UK housing market is now less likely to crash than most other Western countries, according to authoritative new research.

The probability of a house price correction in Britain is now barely one-in-twenty, even if the Bank of England hikes up interest rates in the coming years.

However, some other countries such as the US, Spain, France and Denmark are perilously close to a crash.




The research, from the Organisation for Economic Co-operation and Development, shows how the recent "soft landing" engineered by the Bank of England has dramatically reduced the danger of a potential crash.

Only last year, analysts were predicting that the chance of house prices collapsing in the UK was up to 30pc.

Using complex economic tools, the Paris-based OECD discovered that the probability of house prices "peaking", or slumping, is currently only 4.6pc. If the Monetary Policy Committee raised borrowing rates to 5.5pc, the probability would rise to 8.9pc, and if rates were hiked to 6.5pc, the chances of a crash would rise to 13.2pc.

However, if house prices keep rising at their recent annual rate of around 5pc, there is only a 5.4pc chance of a crash - even if the MPC raises rates to 5.5pc.

The UK property market's relative health becomes apparent when compared with its international counterparts.

The OECD research shows that, if prices were to continue rising this year at the same rate as in 2005, and if interest rates rose by a percentage point, Denmark, New Zealand, France and Sweden would be almost certain to suffer a crash, with Danish property owners the most vulnerable.

A survey published today by Rightmove shows that house price growth in the South is outpacing that of the North

[grupo guitarlumber] 15/6/2006 10:10

ECB says euro zone house prices rose 7.6 pct in 2005

FRANKFURT (AFX) - The European Central Bank said it estimates that euro zone
house prices rose 7.6 pct in 2005, after an increase of 7.2 pct in 2004.
"Recent data clearly point towards persistently strong dynamism (in house
prices)," the ECB said in its June monthly bulletin.
In real terms house prices are increasing at close to their fastest pace for
two decades, it said.
"The continued strong dynamism in residential property price increases
observed in some regions of the euro area warrants ongoing monitoring," it said.
The central bank said it detected some signs of a slowdown in euro zone
house price gains in the second half of last year, but property markets remain
dynamic.
Euro zone house price growth is estimated to have eased to 7.2 pct in the
second half of last year from 8.0 pct in the first half, it said.
Trends in national property markets continued to vary widely.
The ECB said house prices in Belgium are estimated to have risen 17.1 pct
last year, while the French market rose 15.5 pct and Spain 13.9 pct.
But prices in Germany fell 1.6 pct, the fourth consecutive annual decline,
it said.
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[grupo guitarlumber] 12/6/2006 15:59

Spain, `Garlic Market' No Longer, Harvests Europe (Update2)
June 12 (Bloomberg) -- Spain, the strong man among European economies, is muscling in on its neighbors while staking out a role in the world's fastest-growing markets.

Derided when it joined the European Union as a ``garlic market'' where rampant inflation and bulging deficits eroded investor returns and growth, Spain is set to expand faster than the EU as a whole for the 12th straight year. The nation's $1.2 trillion economy has almost doubled in size in the past decade and now vies with Canada to rank as the world's eighth largest.

After a decade of bulking up with purchases in Latin America, Spanish companies are now shopping locally, undertaking $100 billion of takeovers in the EU in the past two years. Spain is also forging ties with emerging economies in Asia and Russia, created more than half the new jobs in the EU in the last five years and will run a budget surplus for a second year, while Germany, France and Italy are all breaching the EU deficit limit.

``I don't think anyone quite anticipated this,'' said Mauro Guillen, author of the book ``The Rise of Spanish Multinationals'' and a professor at the University of Pennsylvania's Wharton Business School in Philadelphia. ``It is one of the fastest-growing economies, and it continues to create jobs. Entrepreneurship is on the rise, and Spanish companies are expanding around the world.''

Grupo Ferrovial SA's 10.1 billion-pound ($19 billion) bid for BAA Plc was accepted last week by the board of the world's biggest airport owner over a larger offer from a team led by Goldman Sachs Group Inc. Abertis Infraestructuras SA said in April that it will buy Italy's Autostrade SpA for 12 billion euros to form the world's biggest toll-road company.

Buying Spree

Santander Central Hispano SA followed a decade-long Latin American buying spree with the 9 billion-pound purchase of London-based Abbey National Plc in 2004, helping it become the euro region's biggest bank by market value, worth almost 69 billion euros. Telefonica SA topped the takeover list with last year's 17.7 billion-pound purchase of O2 Plc, the U.K.'s largest mobile-phone company.

In the run-up to the start of Europe's single currency, Spanish companies were seen more as targets than conquerors, held back by an economy in shambles and too small to defend themselves against European rivals once the single market brought down protectionist barriers and leveled the playing field. In 1993 the economy was emerging from recession, inflation was near 5 percent and the benchmark interest rate topped 13 percent, choking growth and competitiveness.

Spending, Debt and Inflation

Successive governments went about controlling spending, debt and inflation enough to defy skeptics and meet the conditions to join Europe's single currency in 1999. The falling interest rates propelled domestic spending that fueled growth of an annual rate of more than 2 percent every quarter for the past decade. The lower rates cut corporate borrowing costs, making it easier for companies to finance the Latin American push.

Now, Prime Minister Jose Luis Rodriguez Zapatero is using the strength of Spain's domestic economy and the growing reach of its biggest companies to expand the country's economic influence through alliances with emerging economies such as China, Russia and India.

Those Asian nations are particularly interested in using Spain as a bridge to Latin America, a region of about 500 million people where Spanish companies control a huge swath of the telecommunications, banking and energy markets from Mexico City to Tierra del Fuego.

A Latin Partner

``For Asian businesses, Europe and South America are very difficult to understand,'' said Jose Maria Tarrago, executive vice chairman of Ficosa Internacional SA, an auto-components maker with a joint venture in China. ``They can manage the U.S., but in these countries it is very difficult to go solo. Spain in this respect can have an important role.''

Russian President Vladimir Putin tapped Zapatero, 45, for advice on Latin America when the two leaders met in Madrid in February. The same day, Spanish oil company Repsol YPF SA announced the opening of its first Moscow office to manage joint ventures in the Russian energy sector.

Chinese Premier Hu Jintao's visit to Madrid in November paved the way for Telefonica, Europe's second-biggest telephone company by market value, to raise its stake in China Netcom Group Corp. (Hong Kong) Ltd., China's second-biggest fixed-line operator, to 9.9 percent. Telefonica uses Huawei Technologies Co. Ltd. parts in its Latin American networks, and China's largest telecommunications-equipment maker opened an office in Madrid.

Chinese Immigrants

The Bank of China Ltd. teamed up with Banco Bilbao Vizcaya Argentaria SA, Spain's second-largest lender, to provide remittance services for Chinese immigrants in Latin America and the U.S.

``China has an interest in Spain because Spain has an interest in Latin America,'' Emilio Ontiveros, chief executive officer of Analistas Financieros Internacionales, a Madrid-based financial advisory firm, said in an interview April 4. ``It's a very attractive triangle.''

Foreign Minister Miguel Angel Moratinos and his Chinese counterpart, Li Zhaoxing, pledged to strengthen the strategic relationship between the two countries in a June 10 telephone conversation. Finance Minister Pedro Solbes's April 12 visit to Beijing was the third top-level meeting between Spain and China in a year. Zapatero has a trip to India penciled in for July.

Spain's economic clout is reflected in the performance of government bonds. Its benchmark 3.15 percent bond due 2016 has about the same yield as the comparable German bond, signaling that investors consider Spain as creditworthy as Germany, Europe's biggest economy. A decade ago the yield spread between German and Spanish bonds was 2.3 percentage points.

The value of nation's benchmark stock index has gone up 4.7 times since the start of 1993, easily outpacing the Dow Jones Euro Stoxx Index of companies in the euro region, up 3.3 times in the same period.

``They've been one of the stellar performers of the euro area,'' said Carmen Nuzzo, an economist at Citigroup Inc. in London. ``It's been a real surprise how long the outperformance has been sustained. The strength and dynamism of private consumption have exceeded expectations.''

``Maybe there is further to go, but they have posted remarkable achievements,'' Nuzzo said.



To contact the reporter on this story:
Ben Sills in Madrid at [e-mail].
Last Updated: June 12, 2006 04:51 EDT

[waldron] 01/6/2006 07:34

Arcelor hikes stake in Morocco's Sonasid to 32 pct; seen at 50 pct after
buyout

LUXEMBOURG (AFX) - Arcelor said it has hiked its stake in Morocco's largest
steel manufacturer, Sonasid, to 32.43 pct from the 7.5 pct it held in March, and
that it will launch a buyout of minorities that will raise its interest to 50
pct.
The new stake was purchased at 1,350 dirhams per share, the European
steelmaker said in statement. The total cost of the acquistion was not
disclosed.
Arcelor executive Roland Junck said the purchase "will enable Arcelor to
strengthen its positions on markets with high growth potential."
Arcelor's interest is via a holding company, which now owns 64.86 pct of
Sonasid's equity.
Arcelor's stake in the holding company is 50 pct, with the remainder divided
between Sonasid's other main shareholders. These include Axa Assurances Maroc.
In accordance with Moroccan stockmarket regulations, the holding company
will now make a public tender offer for all remaining Sonasid shares.
Sonasid (Societe Nationale de Siderurgie) is the mainstay of Morocco's steel
industry, specialising in long steel products. Its annual production capacity is
around 1.4 mln tonnes. Its 2005 sales totalled 4.7 bln dirhams (around 433 mln
eur).




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