Spanish Mortgage targets missed
February mortgage figures in Spain showed a drop on completions in January and a lower average loan amount culminating in less capital being lent.
The data supports the anecdotal information coming from the Banks that lending targets in Spain were short of expectations in the first quarter.
The average loan size in the month dropped from € 122 euros in January to € 119.7. This was however a significant increase from February of 2017 when average loan sizes were € 116.1k.
In total 27.945 new home loans were registered with capital lent reaching 3.345.232m.
The number of Spanish mortgages dropped by 6.2% on January, capital lent by 7.9% <and average loan size by 1.8%.
Whilst down on the previous month the numbers made better reading when assessed against the numbers of the same month of the previous year.
The number of new Mortgages in Spain were up 13.8%, capital lent 17.4% and average loan size 3.1%
Home loans
Annually accumulated due to a good January in 2018 the numbers remained above 2017 and due to a much higher loan size than 2017 capital lent despite Februarys figures was is up 17.6%.
The percentage of new credit flowing into the market that related to Spanish home loans increased in February to 63.9 of all new lending suggesting that whilst numbers were down the level of funding for dwellings held up in the month.
Spanish non resident lending is holding up well.
Interest rates continue to drop
Interest rates dipped in February from 2.68% average in January to 2.66%. A number of Banks who raised fixed rates in the month of January due to higher cost of funds dropped the rates again in February/ March.
Fixed rates made up 37.6% of all new contracts take. Average fixed rates were 3.26% down 3.3% on previous year.
Bankinter for instance raised the 20 year non resident rate to 2.75% in January but dropped this back to 2.65% as a best buy for completions up to 9thof May.
Targo Bank dropped rates in March to as low as 2.4% in April to attract new business and competition between lenders to gain new borrowers is increasing .
Spanish Banks need new clients to hold their mortgage book profitability and retain other ancillary products such as Bank accounts, and insurances.
Whilst lending margins are very low due to many years of more loans coming off the books than being added the Banks are also under pressure on earnings from loss of clients holding other products.
Madrid outperforms other regions
For one of the few months ever Madrid region had a higher number of new loans registered than Andalucia. Normally by volume Andalucia is the largest region in Spain.
The Balearics was one of the few areas up on the levels of loans over January both previous month of 2018 and the same month of 2017.
Murcia for a long time in the doldrums also had a positive month showing increases over the month before, annually and annually accumulated.
After Januarys figures saw an increase to the net mortgage books held by the Banks February saw a net outflow of 668. Whilst this will be disappointing for the lenders the outflow has slowed in comparison to where it was with the odd month showing increases.
In general the market seems to still be recovering and lenders are motivated to lend but the first quarter will be behind where the market had hoped it would be.