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