Loans in Spain for March 2016 fall over February


Mortgage data for Spain

Whilst the housing recovery seems to be continuing the loan market is lagging a little behind.

The number of mortgages granted is increasing but at slower levels than the beginning of year.

In March the average loan size for mortgages in Spain dropped from February by 4.8% but was up on the same month of last year.

The number of new loans at 22,983 was down on February by 7.7% but remained up  when assessing against the same month of the previous year. Annually taking into consideration the first 3 months of 2016 the number of loans are up 13.7%.

Normal lending trends

This trend of the number of loans being signed being less in March than February is normal but it would be hoped that given the Spanish Banks are now keen to lend and the housing market is improving that normal trends would be bucked and we would see a regular steady month on month growth.

Capital lent was down 8.2% on February and up 20% on the same month of last year mainly due to a much higher average loan size than last year. Overall for  the first three months the amount of money lent is up 14.9% on last year.

As with numbers of loans it is normal for March completion levels to be below February.

Of all new funds flowing into the market 59.3% went toward the buying of a Spanish residence. This was increase on the percentage of loans made for the buying of a home in Spain over February where only 54.2% of all new credits were for this purpose.

Fixed rate contracts continue to grow

The level of fixed rates being contracted as a favoured choice for a mortgage in Spain continues its momentum. In February 10.8% of all loans completed on a fixed rate, in March this increased to 12.4%.  This compares to fixed rates forming well below 10% of all new credits in previous years.

The 12 month Euribor continued to be the index used for most variable rate loans.

The average interest rate being charged for the purchase of a home dropped in March to 3.25% from the level in February of 3.31%.

Regional performance

Regionally Andalucia and the Canaries bucked the trend in the month over February with a higher number of loans successfully going through the mortgage application process. The number of loans was up 0.8% on February levels in Andalucia and a whopping 88.3% up in the Canaries. Due to the average loan size Andalucia saw slightly less capital being lent over February and the Canaries was up only 56% in terms of money actually lent.

Murcia, Valencia, Madrid and the Balearics all saw a fall over Februarys loan levels although across the year, of these regions ,only Murcia has seen lower levels of Spanish Mortgages .

Mortgage book net outflows

The gap between the amount of loans redeemed or cancelled versus new credits constituted widened again in March. In February  3,259 more loans were redeemed than new loans made and in March this increased to 5,491. The net outflow of lending remains a major challenge for the Spanish Banks after years of reducing their loan books the continuing reductions will affect earnings.

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