Mays mortgage completions in Spain continue to fall on last year

Despite having lending targets in place, reducing interest margins and launching new product Spanish Bankhes requesting loas continue to see a decline in new mortgages completed.

Spanish mortgage completions reduce year on year

May figures for mortgage completions in Spain declined on the same month of the previuos year both in terms of number of loans, capital lent and average loan size.

Whilst in the Month of May new mortgages increased from April this is a normal trend for the time of year and is no indicator that things are about to improve.

After many years of actively reducing their mortgage books 2014 has seen most Spanish Banks come back into the lending game. If they thought just opening the doors to credit again would have people flowing into the branches requesting loans, the Banks have been sorely disappointed.

Spanish Banks need to consider their current marketing strategy

With half year figures being well below expectations some of the Banks have started to aggresivley attack the market with new product and marketing campaigns.The real issues that lie beneath the surface are yet to be tackled and include the adding of compulsory products, a fear of the financially comlex high net worth clients and an inability to want to get involved in any areas of lending like re-mortgaging and focussing on purchases alone.

To ensure future earnings, volumes need to increase and the stronger Spanish Banks will need to decide quickly how in a still lack lustre home market they can safely increase credit granted by way of a mortgage.

May key facts 

May saw a decline of 3.4% in numbers of mortgages granted to homes from May last year and annual declines are now over 18%.

Mortgages in Spain completed for residential homes totalled 17,963 and mortgages cancelled in the same period of May totalled 23,405.

Read the full article : Mortgage completions in May is bad news for Spanish Banks