Resurgent Spanish property market prompts new mortgage launches
Four years of rising property transaction volumes is signalling the start of a renewal in the Spanish property market, according to data released by BNP Paribas and UCI, its joint venture Spanish domestic lender. Total property transactions have now risen for four years in a row, from a low of 300,000 in 2013 to just under 460,000 in 2016, according to the bank. At the same time, mortgage volumes have risen to €30 billion from a low of €20 billion over the same time-frame.
This uplift in activity has led to a renewal of interest in Spain as a destination of choice from abroad too. Foreign buyers are returning to the market in strength. From an absolute low in 2006 when overseas buyers accounted for just 6% of all transactions, this figure has now risen to over 17% by 2016, with British buyers again the largest group, accounting for nearly 19% of foreign transactions, more than twice the number of French buyers in Spain, the next largest cohort.
Against this background, new mortgage providers are beginning to return to the market. The Spanish banking system was hit badly by the credit crunch, with many of the household expat mortgage names such as Sol Bank and Halifax disappearing or merging, according to expat euro mortgage brokers Offshoreonline. At the same time, in common with the rest of Europe, new lending rules are now in place designed to limit lending and make house buying a safer process for both lenders and buyers. Guy Stephenson, a spokesman for Offshoreonline said, “European mortgage lenders have traditionally followed a model based on an individual buyer’s personal “debt ratio,” which is a way of limiting the total exposure to loans for a customer, i.e. an affordability test. Buyers are not allowed to exceed certain debt ratios, once all mortgages and other loans, both Spanish and in their home country, are taken into account. As brokers, one of our jobs is to prequalify buyers and ensure they meet the debt ratios now in place, which means that a buyer knows exactly what they can afford at any given time.”
Offshoreonline has revealed details of new Spanish mortgages available to brokers only for buyers in Spain offering greater flexibility on an individual’s debt ratio, fixed interest rates from 1.99% and with buyers now able to include UK rental receipts and pensions as part of their overall income calculations. Guy Stephenson said, “All in all, this is an attractive and flexible new launch from a large lender, who are is keen to work closely with regulated brokers and keep the quality of their lending high. Buyers are strongly recommended to get at least two quotes and not simply trust the local estate agent to source their finance.”
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