Lending in Spain during May rose again.
2016 loan levels in Spain for the purchase of homes has increased each month throughout the year.
Numbers of and capital lent have seen increases in excess of 20% both inter monthly and annually. Average loan sizes surprisingly fell in May although maintained a small increase over same month of last year.
Notary offices report house price fall
According to the Notary offices the average price per m2 of property fell away in May down by some 5.1%. Whilst mortgages in Spain are rising the expected growth in house prices apart from a few regions remains a hope rather than a reality.
Fixed rates surge ahead
Fixed rate product types continue their surge. Over 19% of all new loans secured in May were on a fixed rate basis. This compares with less than 10% a few months ago. Variable rate products continue to be linked to the 12 month Euribor as the index of choice and with the Euribor in negative territory many lenders are considering writing a base of 0% into the contracts to protect themselves from negative interest rates.
Spanish Banks
Defaults fell in the last quarter so whilst the Banks in Spain continue to see net outflows each month the level of loans in arrears as a percentage of their books is falling all be it slowly.
Mortgage applicants are beginning to work out that with some lenders you can avoid compulsory products after year 1 if you elect to take a fixed rate mortgage product type. Some Banks are avoiding cancellation of these by adding life cover as a lump sum at completion.
Competition for the resident market remains fierce but we have seen little to no movement on rates or conditions for the non resident market since the start of the year.
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