Conflicting emotions on CJEU's line on floor clauses

CJEU delays its Advocate General’s line on floor-clauses while in London the housing market steps back

As if all the people were not awaiting for it, the Court of Justice of the European Union (CJEU) has announced to delay its Advocate General’s line on floor-clauses that were affecting Spanish mortgages.

These clauses have affected many buyers and investors who have overpaid bank entities they had signed their mortgages with since 2009. Previously, a Spanish Supreme Court’s sentence had considered them as void but sufferers had only the right to claim for their conceded mortgages’ payments’ difference until May 2013 so do not the previous ones.

With this statement it will be known if they would claim now regardless the mortgage’s grant date, a measure that will have a great impact in the Spanish bank sector. It is calculated that this CJEU’s Advocate General’s statement could mean for the “four IBEX 35’s entities that had traded this product (BBVA, Santander, Bankia and Banco Popular) a disbursement between 4 to 5 bn pounds, as is stated by the Spanish economic newspaper Expansión.

Meanwhile, in the UK, the pound is still going down in relation to US dollar (it is valued in 1.25 dollars) and it is not discarded to reach the parity with the US currency. His has provoked that, in the housing sector, fund managers such as Legal & General, Foreign & Colonial and Kames cheapen their stock’s values from 5 to 10 per cent and they could cease dealings with an estimated value of 18bn pounds, following The Guardian.

Into the bargain there are going to be sold properties to get cash in order to payback these funds’ investors an estimated figure of 3bn to 5bn pounds. Besides, investors are heading to government bonds because they are seen as “safe havens” for their investments while at the same time in London high-level meetings are being held in order to soothe the likely escape of financial businesses from the City, states The Guardian.

Coming back to our country, from the Spanish economic paper Cinco Días it is being tried to ease Spanish investors when pointing out Fernando Luque’s analyst’s statements noticing that “this freezing of British housing funds’ financial assets is something that is not going to be felt” because “the products sold in Spain” are “liquid assets, are invested in Listed Assets and they are very diversified”.

However it would be reckless to think that the Spanish market will stay totally immune not only from that is happening in the UK but CJEU’s Advocate General’s line on floor-clauses effects as well.

If you have some legal doubt about your investments, savings or assets please do not hesitate to contact us for a complimentary review at clerk@delcantochambers.com

Del Canto Chambers’ Newsroom

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