Dear Sir, MARK Masters' reply to my letter needs answering, to correct some of his misunderstandings and will hopefully give people a better idea of where mortgages are, or are not available.

Firstly, at no time did I say someone with a six month contract could get a mortgage, it's a total non starter; please read my letter again. What I said, was that in addition to a full one year contract, being established on the island for a few years enhance the mortgage terms, availability, etc. Having experienced some 40 years of property/estate agency on the island, I do speak with a wealth of experience, be it concentrated in the main, in the Alcudia/Pollensa area. When the property market hits a down point, and I have seen a number of these during my time here, there are vendors who need to sell, and thus reduce their price substantially. The example I gave if a property for sale at 112.000 euros when a bank would value at over 125.000 euros was only one example, there are others i.e. recently sold, a three-bedroom terraced house, 100 metres to the sea, sold for 210.000 euros, when a year before a similar property sold for 257.000 euros, and bank valuation matched this.

On the “black money” issue, this is becoming less of an issue these days, due to the catastral value being raised by authorities, on which the minimum value can be declared, and in fact buyers are recommended to pay the correct price, helps their tax situation whenever selling on. Also, the mortgage taken out dictates the minimum price that can be declared. So, on the example taken of a property valued by a bank at 125.000 euros, an 80 percent loan would amount to 100.000 euros, so with a purchase price of 112.000 euros, leaves an amount of 12.000 for the buyer to find. Add to this the seven percent buyers tax together with notary and registry fees representing another one percent, makes a total of eight percent cash, not 11 percent.

A point to remember. Banks have a standard base for valuing, area, position, metre-square of land, built metre-square and age of construction. The actual selling price, market fluctuations, etc. are not their priority, what is, is that the person looking for a mortgage can afford to pay it off over the years. The authorities, in conjunction with bank have schemes and properties available to help young, first time buyers, but unfortunately they are not available to seasonal workers, as I imagine a Spaniard working just six months in the U.K. would not be eligible for a mortgage.

Also, whatever happened to the idea of “saving up towards buying something”? Today it seems everyone expects to get “something” on a total loan, be it house, car, etc and in the meantime spend their income up to the hilt. In Spain, there is still the idea that people put “something” into their purchase, which I think is no bad thing.

In conclusion, Dr. Masters should not worry that the island will become a “geriatric state”, there are plenty of young people buying, my own two youngsters doing just that during the last couple of years, completely off “their own bat”. I'm proud to say, so the future of the island is assured!

Yours sincerely, Graham Phillips
Palma

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