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