Overview of activity
Activity across all areas of mortgage lending in Spain have increased during 2017. Growth has not been consistent during the year with a few blips along the way but in general average loan sizes are up, capital lent looks to have recovered and numbers of new loans will also have increase from 2016.
All Spanish lenders put in place at the beginning of the year very challenging targets and whilst these will not have been met never the less business levels have moved forward well during the last 12 months.
Buyers increase
Investors keen to make the most of low pieces per square meter have flocked to the major buying areas and Spanish nationals off the back of slow but sustained economic recovery are making high ticket purchases again like the buying of or upgrading of their home.
Interest rates have continued to fall during the year and fixed rates as a percentage of all new lending has continued to rise.
Fixed rate activity grows
Fixed rate interest levels fixed for the full term have encouraged people to consider this product type despite traditionally most mortgagees electing for variable rate products.
Best buys have fallen during the year with even non resident mortgage applications achieving rates from 2.1% for 10 years.
Underwriting
Risk assessment remains diligent but there is now some flexibility and underwriters come under pressure from retail sales to take a slightly more pragmatic approach to new files.
Whilst criterias must be adhered to more complex applications are now being underwritten which has not been the case for many years.
It is hoped that 2018 will continue the upward trend and that we will see more months in 2018 where new lending business outstrips cancellations and the Spanish Banks lending books start to grow again.
Read the full article:- 2017 review of Spanish loan market
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