Mortgages in Spain stuck in pipeline

Loan levels down

After a good start to the year the last two months have seen significant dips in loan levels and capital lent for Mortgages in Spain.

The key reason appears to be the speed at which loans can now get to completion due to new regulatory requirements.

Pipeline log jam

There is a log jam with most Spanish lenders and the calling off period that must start again if an offer expires is causing delays.

The number of loans redeemed in the month was lower as well reflecting the fact this may be a pipeline issue rather than a drastic reduction in business.

Levels better than August

Septembers reported figures were up on August but some 31% behind the same month of last year.

Whilst the average loan size went up this was not enough to compensate for the lack of numbers so capital lent was down.

All regions of Spain saw a hit although Madrid had a much better month than others.

Middle East and UK applicants continue to see access to the full range of products decrease.

Read the full article :- Loan levels in Spain under pressure

Regulation hits loan volumes in Spain

Spanish loan levels dip in August

A number of factors have culminated in a large drop of loan completions in Spain.

Much of this is down to the changes in legislation and new regulation which neither Banks in Spain or Notary offices were prepared for.

Confusion over what the new legislation required, technical issues with lenders and differences of opinions over cooling off periods all played their part.

Brexit reduces non resident Spanish Mortgage applicants

On top of delays to booked completions Brexit has also played a part in the reduction of new loan deeds for Mortgages in Spain as the non resident lending levels have been affected by a lack of UK borrowers.

Interest rates in the month fell which was one good sign.

Numbers were down over 29% on Julys figures and over 35% on same month of last year.  only now coming into November are we starting to see delayed mortgage applications and offers coming through.

2019 will be a struggle

This will all be too late to save 2019 which whilst still showing growth over 2018 has seen in the last two months this growth reduce considerably.

Read the full article:-New mortgages take a hit in Spain

Sabadell change criteria for British applicants

First lender in Spain drops loan to values due to Brexit worries

In an unusual move Sabadell Bank in Spain has become the first non resident lender to make a sweeping change to its loan to values for UK applicants wanting a Mortgage in Spain.

Have other lenders taken action 

Whilst other lenders remain cautious when underwriting a loan from a UK applicant and only give the full 70% for top quality borrowers no others have just precluded everyone who is resident in UK from the 70%.

Whether Sabadell have jumped the gun and others won't follow or whether as was the case during the banking crisis eventually they will all drop to 60% remains to be seen.

Is 70% still available

For now whilst it is a diminishing pool of lenders and criteria are tough there remains a handful of 70% loan to value lenders accessible for UK residents buying in Spain.

Applying with Sabadell, what should I do

For those going through the application process currently with Sabadell they may fall foul of the change and if they need 70% to complete should consider looking for an alternative now.

Read the full article:- Sabadell Bank drop loan to values for UK residents

Currency rule affects borrowers in Spain

Currency legislation

The new legislation implemented in Spain in June has seen some Spanish Banks pull offers to certain mortgage applications in process who live and work in jurisdictions they don't want to deal in.

Because each Bank has taken their own view on what the legislation means and because it is worded in an ambiguous manner lenders have restricted lending to those who currently earn their incomes from currencies like Dirhams in the Middle East and or Far East currency like the Hong Kong Dollar and Singapore.

Lender restrictions

Some lenders are even restricting lending to those living in Canada and Australia because they don't want to move any future loan to those currencies.

Even where the lender believes it only affects those who are EU citizens this has had a knock on affect of access to fixed rates for British Nationals who are currently deemed to be EU citizens.

Seek more information 

In order to know whether an application should be made to a certain Bank or whether to not waste your time it is best if you do not earn your money in Euros to seek the help of an experienced professional who has many years experience with Banks in Spain and arrangement of Mortgages in Spain.

Read the full article:- Currency legislation affects Spanish borrowing

European borrowers in Spain

Brexit affects UK buyers in Spain

Concerns over outcome of Brexit on UK economy and low pound seems to be putting off some UK buyers and borrowers in Spain.

The last few months have seen UK applicants for mortgages in Spain drop due to uncertainty over Brexit. One of the key reasons being the level of the pound and how this has impacted on the total price being paid.

Visa issues and drop in pound main reasons

Other concerns include visa issues, which are unlikely to be onerous and prevent UK residents making the most of a holiday home, and ability to long term retire in Spain.

Scandinavian and Belgian borrowers reap benefit

New regulation which has affected other nationalities like those residing in Middle East is a positive for other borrowers like Belgian, Swedish and German buyers who earn there income in Euros and other Scandinavian buyers who are seen as stable and reliable payers by the Banks.

IMS montage information services has seen an increase in other nationalities and a decrease in last few months of UK loan applications.

Read the full article :- European non resident borrowing Spain

July loan figures improve on June

July mortgage completions in Spain

July saw a rise in Spanish loan completion from June this year and July last year.

June levels were depressed due to cancellation of completions because of regulation changes. July may have been affected by some of Junes anticipated completions rolling over to July.

Interest rates

Interest rates remain stable although fixed rates are up on last month and last year, however these are by very small margins.

Affect of regulation on certain borrowers

Some nationalities have had loan offers pulled due to Spanish Banks stopping lending to some applicants who don't earn their income in Euros or any of the major currencies.

Scandinavian, Belgium and German buyers and borrowers are on the increase.

Read the full article :- July home loans up in Spain

Loans in Spain under pressure

June figures show lax lustre loan levels

Data published by INE in Spain for June Spanish loan levels show the market is under pressure.

This for a variety of reasons. Concerns in Spain that economic growth is stalling, that global economy is under pressure, Brexit impact and new loan regulation  are all playing their part.

Will things improve

It is unlikely July and August figures will show any improvement if only for fact a number of completions have been postponed and delayed due to the lenders in Spain not being ready to deal with regulation changes and unable to meet the new requirements for a few weeks.

Whether toward back end of year this will balance out or the continued uncertainty of buyers tightens the market further remains to be seen.

Interest rates remain stable

Interest rates continue to fall marginally over last year but new regulation may have an affect on access to fixed rates for a number of mortgage applicants as Banks in Spain adapt their portfolio to meet the new requirements.

Applicant criteria

At present UK nationals can still expect to get up to a maximum of 70% loan to value but if the UK crashes out of Europe without a deal it is anticipated this will drop to 60% and that debt to income ratios already adjusted by some lenders will tighten further.

Read the full article:- Spanish loan levels dip in June 
 

May loan completions Spain

Mortgages in Spain

Loans in Spain registered at land registry are have not as yet been affected by the slowdown in completions due to new legislation changes launched June 16th 2019.

Many completions booked for the end of June rolled to comply with new paperwork requirements into July and possibly August.

INE data

As the INE data is based on registered rather than completed loans it will probably be September when we see August registrations that the affect will be visible.

Interest rates news

 With news coming from ECB that interest rates may have to be cut again variable rates have dropped on last year and fixed rate best buys may also see decreases over the next few weeks.

At one point it was thought rates may increase so Span wish Banks adjusted fixed rate offerings but this concern may well now have subsided.

Loans for Rustica property

Loans for Rustica properties have dropped to an all time low as a percentage of total lending outlining the difficulties of obtaining a Spanish Mortgage for property that sits on this type of land classification.

Read the full article :- Registered loan completions Spain

April lending news Spain

Loans in Spain

Whilst confusion still reigns in terms of what impact new regulation in Spain will have Aprils loan figures for mortgages in Spain showed little growth over last year and last month.

Regional growth stagnates

Many regions saw decreases in terms of numbers of new loans and with little increases in average loan sizes capital lent also fell.

Many of the key regions are struggling although do remain up year on year due to a good first couple of months only Andalucia is well up on last years figures.

Interest rates drop

Fixed rate mortgage product types grew as a percentage of total lending and average fixed rates and variable rates fell within the month and are down on last year.

New regulation and lack of clarity around what must be done and by when has slowed down the mortgage application process and some lenders have removed fixed rate opportunities for certain applicants due to the new requirement to allow currency switching at a later date.

Read the full article : - House lending news Spain

New mortgage legislation in Spain

New loan rules for Spain

As from June 16th 2019 new Spanish loan legislation is applicable by law in Spain.

The new rules are part of an EU directive to bring member states in line with each other and provide a more transparent and consumer protected mortgage process across the whole of Europe.

What will the changes mean

There are a number of changes some of which have already been implemented by the lenders in Spain and other areas that will require new processes are undertaken.

The changes cover many aspects from costs that can be applied to the borrower, how TAE ( APR) is calculated and early repayment penalties.

Will changes affect speed of process 

The changes also require that the customers are better informed of the options they have, have a minimum cooling off period and ensure by way of checklist the Notary must have in place that it is understood by the borrower what they are contracting.

As with all new legislation some of the changes will make getting and completing on a mortgage in Spain more complicated and slower but in general most is a move in the right direction for consumer protection.

Spanish Banks yet to implement all changes

Spanish Banks have not as yet published how they will adopt the requirements going forward and we expect this to happen shortly as the law becomes official in a couple of weeks.

Read the full article :- Changes to Spanish Mortgage regulation

Spanish home loans update

March figures

In March data published by the INE saw an increase in numbers of new Spanish loans over the same month of last year and a static level from the month of February.

Capital lent due in increases in average loan sizes was up across the board.

Mortgage product fixed versus variable

Fixed rate popularity continues to grown with fixed rate product types being up 24% over last year as a percentage of all new loans constituted.

The average rate for a variable rate over 24 years was down in the moony and fixed rates slightly up over last year.

Interest rates

After 6 months of small increases the 12 month Euribor for mortgages in Spain revisions and completions dropped slightly in April and anticipation of this may have helped lenders reduce variable rate margins.

Madrid best performer

Madrid completed on the most amount of loans and the Balearics and Murcia saw the highest percentage increases in the month.

Read the full article :- Home loans in Spain for March

AJD tax may have caused reduced loans in November

November Mortgages in Spain figures.

Whilst year on year loan levels are up in Spain in terms of all areas including numbers of, capital lent and average loan size, November figures dipped against Octobers by more than is normal.

Spanish Banks delayed completions.

Many Spanish Banks held off mortgage applications in November until their was clarity on whether they would pick up mortgage deed tax or not and this will have affected levels of completions.

Fixed rate product types now more readily available

 Interest rates remain low and fixed rates as a mortgage type now make up around 39% of all completions. This is a year on year increase of 18%.

New loan regulation due out 2019.

Mortgages in Spain due to new loan regulation due out which will put further pressure on margins are now really offered on a standard basis with lenders assessing the total risk and profitability based on client fiscal strength, loan to values and contracted products.

For borrowers going forward many of the set up costs will be picked up the Banks in Spain and for now some are making changes already whilst others prefer to wait until it is obligatory.

Positive addition to mortgage books.

For a few months now the net outflow from loan books has been stemmed with November despite its slightly lower figures still providing a new inflow.

Annually all regions except Murcia are seeing a much better year than 2018 which in turn saw big increases over 2017.

Read the full article :- Mortgage deed tax affects loan completions.

2018 mortgage performance to date

October loan figures.

October loan levels in Spain showed a small decrease over September of 2018 but good increases when compared to the same month of the previous year.

Mortgages in Spain grew yearly by 20.4%

Interest rates

Interest rates remain low although we may see some upward movement when December data is published due to the Spanish Banks raising rates after being forced to pick up mortgage deed tax costs.

Bespoke mortgage applications

New mortgage regulation will be issued in 2019 and some lenders in anticipation of the canes are starting to drop charging any fees related to the loan set up for premium clients.

Linked to this are compulsory products and very tight debt to income ratios along with ,minimum net earning requirements but more and more lenders in Spain are looking to tailor product terms to the fiscal quality and risk profile of the applicant.

Net loan inflows in October

More new home loans completed in the month of October than were redeemed giving a second month of net inflows.

Read the full article :- Mortgage performance for October