STERLING / EURO
Range of the week: 1.1741 – 1.1860 (8th May – Current)
Variance of the week on £10k=€119
Variance of the week on £1,000pm=€11.90
In the UK politically we have been dominated over the last couple of weeks over whether or not we should look to leave, amend or keep our relationship with the EU. Starting with local elections where UKIP gained nearly 25% of the vote showing a very real concern from the public and in addition some senior cabinet ministers have said they would vote currently for the UK to leave the EU. The conservatives are saying, should they be elected, they will give the UK a referendum on membership with the EU in 2017. So although not an immediate issue for the UK, some experts have said any removal or reduction of our close ties to Europe will have a damaging effect on the UK economy and the value of the pound. So very much a “watch this space!” topic.
A data heavy week in Europe, and we start the day with growth figures coming out of the Euro-Zone.
The French economy has gone back into recession, its second in four years, after a contraction for the first quarter of 2013 at -0.2%. German figures, also published this morning, were disappointing at 0.1% growth against expectation of 0.3% and now shows the Euro-Zone powerhouse has shrunk by -1.4% over the last 12 months. The Germans were quick to downplay these figures by stating that “The German economy is only slowly picking up steam. The extreme winter weather played a role in this weak growth.” – Something we have seen used here in the UK to try and explain our own disappointing GDP figures. It seems if in doubt, blame the weather! And to complete the hat-rick we have seen Italy confirmed as being in its longest recession on record now having confirmed -0.5% for the first quarter.
As you would expect the Euro has weakened this morning, but has not suffered too significantly as the ECB had already cut rates this month to a record low of 0.5%, and in doing so acknowledging the need to try and stimulate some growth in the Euro-Zone. Some analysts are now expected to revise down their forecasts for growth in Europe with Barclays saying there was “significant downside risk” to it’s forecast of 1% growth for 2013. This was re-emphasised as Euro-Zone GDP as a whole came out at -0.2% for the last 3 months.
In the UK, unemployment figures were up to 2.52 million or 7.8% of the population so not good news either. This was however overshadowed by the Bank of England inflation report which is always keenly watched. The Sir Mervyn King said that the UK recovery is insight but that inflation will remain above target until 2016 (we’ve heard this a few times before). The BoE has said their growth targets will be hit again as the “big squeeze” goes on however sterling has risen on the back of the report.
The rate movement in this pair has been limited to 1% range for the last two weeks despite the ECB cutting interest rates last week to a record low of 0.5% and signalling they cut rates further. The rate cut was expected by the majority of forecasters but it wasn’t a done deal so the Euro did weaken a little on the announcement. Many expect that the central bank will now keep their powder dry for the foreseeable although the same was though after the last rate cut until the data from Germany showed signs of weakness, warranting a cut.
Following the Royal Decree 235/2013 (5th April), ALL houses will be required to have an official Energy Performance Certificate (“Certificado de Eficiencia Energética” in Spain or CEE for short) as of 1st June 2013. Before this date, only new houses were obliged to have this certificate but now the Spanish government are applying this EU ruling to all dwellings. This ruling applies to all new, resale and rental properties. The CEE provides a summary of the building’s overall energy efficiency and its impact on the environment, calculated by standard occupancy assumptions.
There appear to be different levels of work that can be carried out to provide a CEE, with cursory ones resulting in poorer levels of banding but with the more studious ones giving the possibility of improving the banding. It would be logical to assume that the better the band, the higher the property price will be as buyers will note the energy savings over a lower banded property with higher energy costs.
It would be prudent for Administrators and Promoters of apartment blocks to obtain the CEE for the individual properties all in one go, thus reducing the costs of individual surveys. Even if a current owner isn’t planning on selling or renting their home at the moment, given that the CEE lasts for 10 years, it would be wise for them to obtain one, thus facilitating the selling or rental process should the need arise in the near future.
Please contact Beatriz Aybar at INGEARQ INNOVA on (+34) 637 474 235 and quote “Ideal Country Property” to benefit from these prices. Alternatively, get in touch with us and we can arrange a personal, no obligation quotation for you.