View more on these topics

Finland: Warming Up

Despite a growing reputation in the football world, Finland has yet to secure a place in the World Cup finals.

One of our teams best performances came in the qualifying round for the 2002 World Cup when we faced Germany and England. We held both of these hugely experienced teams to draws, leaving us third in our group a respectable result given the strength of our opponents.

The Finnish property market has shown a long period of price inflation since the beginning of the 1990s. During the past few years, price increases have picked up and credit demand has remained strong.

The current level of household debt in Finland is lower than in other countries in the EU but has been increasing in recent years. It has to be said that we Finns are conservative borrowers.

The mortgage market in this country is different to that in the rest of Europe. Changes in housing wealth have had a significant impact on consumption in the marketplace and, with an overwhelming number of mortgages being financed at short term variable rates, disposable income and the wider economy are more vulnerable to changes in interest rates and house price cycles than in some other markets. The good news is that the overall economy in Finland has remained strong.

With property taxes being relatively low, the deductibility of mortgage interest expenses favours home owners over other investors. Also, sellers pay different rates of Capital Gains Tax depending upon the length of time a property has been owned. This is different from neighbouring Sweden where owners pay Capital Gains Tax on the sale of their main residence, irrespective of the duration of ownership.

Housing prices across the whole of the Euro zone have been on the up since the late 1990s but prices in Finland have increased at a slower rate than other parts of Europe. In 2004, house prices rose by around 7% with Helsinki seeing the largest increases. From the start of 1996 to late 2004, house prices in the capital rose by 98%, compared with just 7% nationally.

Finland is famed for its saunas and almost every house in the country has one built in. Interestingly some houses must have more than one as figures show that there are 1.1 million residential buildings in Finland boasting 1.2 million saunas.

With the housing market heating up, lets hope it wont be too long before our team puts in steaming performances on the pitch and representing us at the next World Cup.

Pekka P㳴iniemi is CEO of GE Money (Finland)

Recommended

Securah launches website

Securah has launched its website with the aim of making it easier for intermediaries to work with it.

I should be cynical but some financial services stories still make me smile

From Noel BroadgateYoud think that having been in financial services since John Prescott had a Cinquecento I would be reasonably cynical by now, but things still occur daily that make me smile. Here are a few.I understand the raison detre of Home Information Packs is to provide full and accurate information to potential buyers about […]

Landlords anticipate house price increase

A vast majority of landlords expect to see a significant increase in house prices over the next 12 months, reveals the latest survey from Mortgage Trust.The survey shows confidence in the housing market has reached record levels with 90% of respondents expecting house prices to rise over the coming year.Within that 90%, 53% expect an […]

Solent launches 10th brand with Kensington

Solent Mortgage Services has launched its 10th mortgage brand, Collingwood Homeloans, in association with Kensington Mortgages. Collingwood will be the first fully branded partnership launched by Kensington. Paul Robinson, chief executive officer of SMS, says: “Kensington has been a long-term partner for a number of years and we are thrilled that it has chosen SMS […]

Newsletter

News and expert analysis straight to your inbox

Sign up