Finally Some Good News From The Spanish Property Market?


In an effort to try and offload some of the property stock that many Spanish Banks now hold on their books due to developers going bust; a number of banks are looking at discounting heavily the properties and providing virtually no cash in deals to the right clients.

Amongst the banks considering this are Sol Bank part of the Sabaddel Group who are currently discussing the possibility of discounting repossessed new builds by up to 30% to 40% of original purchase price and providing up to 95% of the purchase price on Spanish mortgages for non residents of Spain.

Currently Bank of Santander owners of Abbey National in UK have such a scheme at 100% of purchase price in place for residents of Spain but no one to date has bitten the bullet to provide a similar option for non resident buyers.

The banks will restrict any such offerings to a certain profile of client. Their mortgage provided may have different terms to their standard mortgage and come with linked products but at much higher loan to purchase prices than is currently achievable. Almost certainly, the risk profile will be directed at those potential buyers with low existing loan exposure in their country of residency, have high and clear after tax income levels which could be in the region of minimum £ 50,000 pa and take income from means other than just retained profits or dividends.

For serious buyers of second homes or holiday homes these bank discounted properties could provide excellent value with minimum capital down. The quicker surplus stock can be moved the quicker the whole market will re-cover. Whilst pure investors will probably find themselves excluded from the Spanish mortgage schemes attached to these sales the discounts may still provide a good long-term return on surplus cash they are holding.

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