June Spanish loan statistics

Junes loan data

June data released yesterday shows that the lending market in Spain continues to improve in 2017.

Whilst there are some blips for certain regions overall the the level of mortgage activity is up across the board.

Bucking the 5 year trend

Junes performance over the good month of May showed another month on month increase bucking the normal 5 year trend of Junes levels slowing against Mays.

Net inflows

The number of loans constituted for the purpose of buying a home in Spain was greater by 176 than the number of home loans cancelled within the month.

This is the only month bar 3 others were this has been the case since the banking crisis started some 8 years ago.

Interest rates

Fixed rates which were charging ahead as the mortgage applicants favoured choice has stalled slightly in the last couple of months with the share of new mortgages in Spain being contracted on this basis falling slightly.

With no sign of base rates rising at the 12 month Euribor at all time low borrowers may be being lulled into a false sense of security and taking variable rates because they are currently lower than the fixed.

Read the full article:- Mortgage activity in Spain

Lending in Spain increases in May

Mays lending data

Lending in Spain saw a marked increase in May after the very low levels seen in April.

The increases were across the board in all areas including numbers of, average loan size and capital lent.

Whilst it is normal for May to be an improvement on the April the month over month increase was the highest percentage for over 5 years.

Interest rates

After a couple of months of rates edging up despite the Euribor dropping May saw average interest rates drop to 2.9% this was a big reduction from the previous month in percentage terms.

Fixed rates as a mortgage product type seem have stabilised at around 35% of all new loan contracts well up on previous years but stalling slightly in the last couple of months. Whether this is clients choosing not to take fixed rates because of lower margins being offered and the current low level of the Euribor or if the Banks are choosing to move away a little from long term but low fixed rate offerings is not as yet clear.

Spanish Banks

All leaders are currently hungry for new business and are way off lending target levels.

Competition is increasing again as we passed the half way point in the year.

On the positive side more loans were constituted in Spain inMay than cancelled this being for only the second month in nearly 10 years.

Read the full article Loan levels in Spain recover in May

Spanish Banks and compulsory products

Spanish Bank margins

Spanish Banks in effort to maintain profitable margins have increasingly become insistent that borrowers and those making a mortgage application contract with the lender a number of compulsory products.

Life cover linked to a loan in Spain

The product most resented by applicants is life cover as many already have enough cover from other providers or via work and the new cover is not necessary.

Often the cost of life cover can turn what is a competitive interest rate into a very costly loan particularly where the borrower is older and or the loan size is large.

To prevent applicants cancelling life cover at a later date most Banks now write into the mortgage deed a rate increase if this happens or take all the life cover premiums upfront by adding it to the mortgage amount granted. This means the borrower is not only paying for life cover they may not require but will be paying interest on it too.

Danger for the Banks

Despite losing a number of recent court cases surrounding unfair practices the Spanish Banks are ignoring this ticking time bomb which may affect profitability in later years if the Courts decide they could not insist the product was taken and are required to compensate borrowers.

Read the full article:- Is life cover the next Spanish Banks ticking time bomb

April loans in Spain reduce

April loan statistics

Following on from March when loan levels were below the same month of last year April has continued this trend.

On top of being down on the same month of the previous year by over 20% April also saw a reduction in numbers of Mortgages in Spain , capital lent, and average loan size against March 2017.

Regional variations

All regions in Spain saw a downturn of loan completions against last year and the previous month.
Most regions remain up for the year due to very high levels of completions in January and February but it is concerning we have seen two months of stagnation.

Home loan credit

The percentage of all credit flowing from the lenders into the market for the purpose of buying a home dropped 54.6%. Normally this is above 60% of all credit. This indicates that buyers are holding off in Spain due to a number if factors including Brexit and the concerns over the fragile economy growth in Spain.

Spanish Banks loan books reduce again

After a few months of either net loan book gains April and a negative outflow although not at the same level as we have seen in previous years.

Read the full article:- Mortgages in Spain monthly statistics

March loan activity in Spain

Mortgages in Spain rise in March

The level of new capital lent for the purpose of buying a home rose in March.

The average loan size of Mortgages in Spain dropped slightly over February but increased numbers of new home loan credits meant overall the amount of capital grew.

Coastal areas increase

Coastal areas and major Cities like Madrid in general are showing good increases in mortgages both for the Month and across the year. The Canary Islands and Murcia are exceptions to this both are struggling to match last years activity levels.

Spanish Banks news

BBVA who have a UK Division announced they will remove themselves from any new lending in both the UK and Spain. Regulated by the UK for the activity undertaken there this may be a response to their concerns over the impact of Brexit on financial service activity. It may equally be that the division struggled to meet the volumes necessary to make the offerings worthwhile.

Other Spanish Banks have this month started to offer IMS clients special deals for a limited period in an effort to pull back some market share.

Banco Popular has come under severe scrutiny in May and is actively looking for a buyer due to the pressure on its balance sheet due to toxic debts and its large property portfolio.

Net mortgage book outflows

Other news includes a reverse of the past couple of months where Banks in Spain have seen their loan books grow slightly. May was a month of net outflows with more loans cancelling than new loans being constituted.

Read the full article:- March mortgage data in Spain

Mortgages in Spain numbers drop in February

Spanish loans

In February the number of Mortgages in Spain registered at land registry and new loans signed in the month dropped in comparison to January.

Capital lent increased however due to a higher average loan size.

Whilst normal for Februarys home loans to decrease against January the drop in numbers was the largest percentage drop for the last 5 years.

House loans

The amount of new credit in the market that related to the purchase of a house also dropped in February.

Fixed rate versus variable rates

Fixed rate loans continued to grow, taking a share of 38% of all new loans, the fixed rate interest level was less than the previous year but overall rates increased marginally.

Brexit causes uncertainty

Coastal areas saw the biggest drop month on month for new loans perhaps under pressure from uncertainty of non resident buyers who mainly come from the UK.

Regionally across the first two months of 2017 against 2016 most regions are still showing an annual increase.

Mortgage book losses decrease

Spanish Banks saw a net loss to their mortgage books for the month after January where there was a small gain but the loss has slowed considerably.

Read the full article :- Numbers of Spanish loans drop in February

2017 January Spanish lending grows

The first month of the new year saw positive growth in Spain for new lending contracted.

Loan levels increase

Across the board all regions increased year on year and month on month in terms of numbers of loans and capital lent.

Spanish Banks will be happy to see that for only the second time in many years the amount of newMortgages in Spain taken was greater than the amount of loans cancelled.

Fixed rate products

Fixed rates continued to grow as the choice of borrowers and now makes up well over 30% of all Mortgages in Spain completed within the month.

A wide range of fixed rates are now available from most lenders with fixed rate terms ranging from 5 years to 30 years. Due to a lack of re-mortgage facilities in Spain and the high costs of taking a loan to a new lender, fixed rates are a very viable option for borrowers.

Spanish Banks have very keen pricing on their fixed rates products and whilst still above the variable rate options due to the low Euribor, they appear to provide a very good medium to long term option.

Best performer the Balearics

Regionally all regions performed above December of 2016 and January 2016. the Balearics had the highest percentage increases and the Canaries the lowest.

Read the full article :- Positive start for 2017 for loans in Spain