Spanish home loans increase again May

Land registry data

Data out today from the statistical office in Spain confirmed the data pusblished by the Notaries and shows Spanish home loans continue to rise year on year.

Total lending was up 7.3% over last year but 10.9% up for those relating to the purchase of homes in Spain.

Both numbers of and capital lent increased both year on year and month on month although the increase of May figures over Aprils of this year was the lowest for the last 5 years.

Variable rate product types made up over 90% of loans signed and the Euribor was the index used in more than 90% of all transactions.

Interest rates

The average interest rate was 11% down on that of last year but marginally up on April. The Euribor fell slightly in May so the higher average rate is due to higher margins charged by the Banks in the month of May. This will most likley be a blip as competition amongst Spanish Banks to secure resident loans remains high.

Regions

The Balearics and the Canaries against better than average perfromance in 2014 both lagged behind the trend of increases seen in other regions and only Asturias as a region is behind 2014 when considering the data for the year so far.

Net outflows for another month

Total number of home loans signed and registered were 19,732 in May but mortgages canceled for yet another consecutive month outstripped new loan deeds signed.

Cancellations totaled 24,433 meaning the overall book of home loans fell by 4,701 and over 1m of capital left the books yet again.

Read the full article:- Land registry lending statistics for Spain in May



 

Mortgages in Spain increase in May and House sales are up

Notaries in Spain

The Notaries council called Consejo General del Notariado publihsed last week the high level data for Mays mortgage completions and house sales in Spain.

Mortgage levels were up by 26.4% year on year and the average loan size rose 6%.

In total 14,213 new loans were granted.

House sales continued to rise up 8.4% but the average price continued to drop slightly.

Annually mortgages are now up 11.5% in 2015 over 2014 and the average loan amount has increased by 3.6%.

Spanish Banks

For the first 6 months of 2015 the Spanish Banks have continued to more aggresivley lend.

This desire to secure more mortgages has helped improve the terms and conditions not just for Spanish residents but also for non resident buyers.

Whilst variable rate remains the most widely offered option more and more lenders have looked to offer long term fixed rates allowing applicants to tie themsleves into competitive long term rates covering the whole of the mortgage term.

Fixed rates can be offered from as low as 1.99% for 20 years but as with all Spanish Loans a number of linked products have to be taken with the lender to secure the lowest possible rate. Direct bank staff are not always as good as they could be at explaining this preferring to focus on headline rates rather than the nitty gritty of obatining them.

Lending Criteria

Criterias continue to be maintained with lenders looking for mortgage applications to demonstrate the borrower is not utilizing in general more than 35% of their proven net incomes for the purpose of debt payments.

Borrowers who are company onwers and do not draw all the income they could each year still have some issues getting Spanish Banks to accept the higher possible incomes rather than those incomes shown on personal tax returns.

More and more lenders are willing to look at 70% loan to value rather than the more standard 60% but many will only do so on a case by case basis for those mortgages they deem to be of more significance to them, and from applicants who meet criteria easily.

Read the full article :-Mortgages in Spain 2015 market update

 

Property transfers in Spain

Mays property sales

Total property transfers in May despite positive noises coming out of Spain remained level with the same month of last year.

The data taken from Land Registry is not the most up to date reflection of what is happening at ground level as it takes 3 to 12 weeks for the registry office to process the file. This means the data can relate to property transfers from some months ago. This said it is relevant against its own reports which have always reflected actual sales but with a time lag.

Dwellings

Sales of actual homes performed a little better than the total transfer market which includes, commercial sales, donations, Inheritance and reposessions.

Sales of homes increased year on year, month on month and remains up for the whole of 2015 when assessed against 2014.

Mays sales are normally higher than Aprils so whilst the trend of increased sales continues the actual increase of May over April was actually the smallest seen for at least 5 years.

Types of property sales

Part of the potential slow down of growth seems to be linked to the dramatic fall off of the buying of new builds. This drop in new build sales may be because developers believing possibly too soon the crsis was over started to increase the prices they were asking for even on developmets  that had been built for sometime and sat empty often for years. A missjudgement of market conditions has had an impact on volume.

Tied into developers loans and with Spanish banks requiring the developer maintains mortgage payments until sale of the unit to a third party it might well be the case that we see discounts on new builds again as the year progresses.   

Regional sales

Regionally, of those areas most attractive to International buyers, Andalucia performed strongly up in all areas in terms of year on year, month on month and for the whole of 2015.

The Balearics which has seen high level of interest for mortgage applicants from overseas buyers in the last 12 months fell back in May and has had a couple of quiet months. The same is true of the Canaries but this has also been reflected in the number of people looking to secure a financial approval for a mortgage in Spain.

The rest of 2015

The Notaries have been reporting miuch higher buying activity along wityh higher activity on Spanish Bank loans so we should see this start to be reflected more significantly in the INE data over the next couple of months.

Read the full article : The transfer of property rights for Spain in May