Growth slows for Mortgages in Spain

March lending figures down on February

Whilst year on year for the first three months of 2016 lending levels of Mortgages in Spain are up on 2015 in March the rate of increase slowed and across both numbers of and capital lent when assessing the data against February.

The trend of lower loan levels in March is normal but with the housing market appearing to be recovering and Spanish Banks being eager to lend it is slightly surprising we are not seeing month on month increases.

Fixed rates

For 2016 the momentum for fixed rates being chosen as the mortgage product type by applicants is continuing. Each month the share of new loans being completed on a fixed rate basis increases. Whilst from very low levels the increases are significant and show a marked change in the market. All Spanish Banks are now pushing and providing access to fixed rates.

 Lack of clarity around early redemption penalties for some lenders will hold back this trend but in general the fixed rate market looks to be a good medium to long term bet.

Average Interest rates

Average interest rates fell in March due partly to the move to fixed rates and a drop in Euribor over the last couple of months. Whilst still in negative territory for May there was a very small increase the first increase in many months.

Mortgage books

For yet another month the amount of loans being cancelled outstripped new loans being constituted. After many years of actively reducing their loan exposure Spanish Banks will remain concerned about future earnings until this trend can be reversed. Currently there appears to be no end in site with only one month in the last 6 years showing a net gain. Pressure on earnings form this area and the environment of low interest rates means the lenders have to up their game in cost efficeincy and further mergers may be seen this year.

Read the full article:- Loans in Spain for March fall over February

Housing and Banking data in Spain

General statistical reports Spain

Last week and this week saw a number of reports published in Spain in relation to house sales, transfer of property rights and the Spanish Banks.

Overall the transfer of property from one individual to another saw a dip in March both year on year and month on month. When the statistics are broken down the sale of actual homes whilst down on Februarys figures never the less are holding up year on year and annually accumulated.

Drops in urban commercial sales and lower levels of swaps and Inheritance affected the overall figures as did a lower level of transfers falling into other titles which includes Bank repossessions of security half for a mortgage in Spain.

Number of house sales

A total of 31,925 homes were sold in March of such only 6,200 were new builds with the rest being sales of second hand homes. This split is a far cry from the boom years when new build sales outstripped resales.

Sales of homes to foreign buyers both those who are living in Spain and those specifically buying a second or holiday home saw an increase through 2015 of 12.9% according to the council of Notaries.

Foreign buyers are made up of all nationalities but the largest group by quite some way is the British. Foreign buyers who lived in Spain during 2015 bought at a lower price per meter square than in 2014 but those who did not live in Spain paid 2.9% more per meter square than in 2014. This may be due to a number of factors, where they buy, type of property they buy and how they sourced the purchase.

Easing of lending to the non resident market during 2015 and an increase in the number of mortgage product types available assisted the market.

Spanish Banks

Spanish Banks also came under pressure last week as the first round of quarterly results for the major lenders showed a drop in profitability due to margin pressures. With interest rates at an all time low it is difficult to the Banks to remain competitive and still make money.

Further consolidation is expected during 2016 with more mergers possibly on the cards and a further streamlining of the branch networks.

Read the full article:- A mixed bag of Spanish data