July Spanish lending declines

Lending levels reduce in July

Data from both the INE and Notary Offices showed a decline in the number of Mortgages in Spain completed and or registered in July along with a drop in capital lent.

This decline is the first year on year drop in the level of new credit flowing into the Spanish housing market for many months.

Numbers of houses sold also declined as might be expected during the month.

Whats affecting lending

Affected possibly by both the political uncertainty in Spain and the outcome of the Brexit vote it is unclear of the slowdown is a grand or a blip.

Spanish Banks, who are falling behind in their target levels for mortgage loans,Internal market conditions will improve  and who are still experiencing a net outflow of loan capital each month may be hoping it is a blip. Criteria for UK based non residents has however hardened in recent months due to concerns over the ongoing exchange rate situation of sterling.

Political uncertainty

Internal market conditions will improve when a government can be formed. This may be assisted by the standing down of Pedro Sanchez in the last few days. Overall credit into the market was down in July and hit even harder than the housing market was credit for new constructions and business loans.

The next few months

Fixed rate product types continued in July to increase their share of the market and overall interest rates were down from the same time last year.

September and October are normally good months for both sales and Mortgages in Spain but present enquiries whilst remaining at reasonable levels are hard currently to turn into tangible business.

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