August lending data
The number of new Spanish mortgages registered at land registry in August showed another upturn when looking at the same month of the previous year.
Capital lent also increased year on year when looking at the corresponding month of 2013 and the average loan size increased to a point that took loan sizes above the level for the same period of time in 2013.
August completions versus July
Whilst the news on August numbers when compared to the same time last year was all good the decrease between the numbers of loans secured against homes in August when compared to the month of July was the highest for 5 years. This would appear to be due to an unusually high level of activity in July this year.
Types of Loans
As is normal in Spain the majority of borrowers took lending on a varibale rate basis. Loans with a fixed rate only made up just over 6% of total completions. The average interest rate on which new mortgages completed is down in the last 12 months by over 12 months. Whilst this is partly due to more competative products being launched by the Banks in Spain the biggest driver of lower rates is the decrease in the 12 month Euribor.
The 12 month Euribor continued to be the most favoured index used.
Diffences in Regional activity
Andalucia continued to be the region with highest number of new loans constituted followed by Madrid and Barcelona. Only the Balearics showed an increase in numbers in August against July and of the non resident favoured markets only the Canaries dropped when looking against the same month of the previous year.
Net outflows
The rate of net outflows narrowed slightly in August suggesting that rate at which mortgages redeem to new finance being taken is slowing and the gap diminishing. After many years of shrinking mortgage books this will be good news for the Banks.
Read the full article: Number of new borrowers increase in August
