Spanish Banks increased lending in Spain again during the month of January.
Both capital lent and numbers of new mortgages grew by over 30% when looking at the same month of the previous year.
Average loan size edged up slightly for the purpose of buying a dwelling.
Lending was up against the figures for December but the rise was not as high as a percentage when compared to the last two years. This percentage however was set against much lower volume levles for 2014 and 2013.
Rates
The amount of mortgages in Spain completing on a fixed rate remained small in comparision to those completing on a variable rate. This may change as the year progresses due to more availibilty of fixed rate products at keener rates and will lower redemption penalties.
As applicants during the coming months start to worry that rates have hit rock bottom and that the Euribor will certainly start climbing again a fixed rtae may look more interesting.
Average interest rates were over 20% below the levels of last year due to margins relaxing and the 12 month Euribor continuing to move downwards.
Regions
Only one region in Spain showed a decrease in lending volumes for the month and the Canaries nearly doubled its volume aaginst January last year and Decembers figures.
All regions best known for their International buyer population showed increases although whilst by absolute numbers Andalucia completed on the highest level of loans the percenatge increase remained below the average mean.
Reduction in loan books
Net outflows was the only fly in the ointment as the Banks failed to reverse the trend of more mortgages being redeemed than new loans constituted. This net outflow remains the key challenge for the Banks during 2015. Whilst keen to reduce their loan books after the crash in 2007, 8 years of net outflows is now putting pressure on earnings.
Competition is starting to hot up to capture a larger share of the buying market and non resident borrowers are no longer a nasty word. New best buys are being launched regularily.
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