September mortgages in Spain
Septembers completion of new home loans in Spain showed a marked increase to August levels. August in turn was improvement on July.
In total 26.667 new mortgages in Spain were constituted in the month according to land registry. This was increase on last months figure of 20.609 and was 10% up on the same month of the previous year.
The numbers look even more impressive when compared to July figures of 18,706.
Average loan sizes
Average loan sizes increased to €113.193 and was the second highest level for any month of this year. The knock on affect of a rise in average loan size and numbers, took overall capital lent to buy a home to over € 3.000m euros.
The amount of new credit flowing into the marketplace that was designated for the purchase of a residence rose from 55% to 59.2% in September. Country properties or those on Rustica land remained very static at 5% of the total.
September performance over August
Whilst it is a normal trend for September to improve on August figures, 29.4% is the highest inter-monthly increase in the last 5 years. It is also off the back of a strong August performance which normally is much quieter on completions than other months of the year.
Interest rates and product types
The level of loans being contracted on a variable rate continues to fall but at a slower pace than we have seen throughout the year. Last month 28.3% of all lending completed on a fixed rate basis with this rising to 30% this month.
Average interest rates dropped slightly in the month and were at their lowest for over 12 months. The average interest rate for loans for the purpose of a house purchase came in at 3.17% in September. This is a small decrease from the 3.24% in August.
Madrid is star performer
Regionally Madrid outperformed all other regions. With 5,086 new loans registered within the month Madrid complete on more loans than Andalucia. Whilst the level of capital lent always outstrips Andalusia, due to average loan sizes, it is very unusual for Madrid to top the table in numbers of loans.
All coastal and non resident buying hotspots saw large increases in both numbers of loans and capital lent during the month. The one exception was Murcia . Murcia has struggled all year to make any inroads to a poor lending performance and cannot seem to break the 700 barrier in terms of number of new loans.
New loans outstrip redemptions
The rise in newly granted Spanish mortgages had, for only the second month in over 5 years, the benefit of adding to the Spanish Banks loan books as new loans outstripped redemptions.
With 26,667 new loans added to the loan books and only 22,302 loans cancelled the lenders saw a net gain of 4,365 loans.
Whilst the level of new loans signed within the month was positive, new lending signed as reported by the Notary offices in Spain showed that the total credit into the market dropped back in the month. This was however entirely down to commercial lending as new loans signed for the purpose of buying a home rose in line with new loans registered at land registry.
These increases were due to an increase in the sale of real estate during the month.
Construction loans which had seen some increases in the last few months as developers came back to the market, saw a drop of 8.6% in the month and the number of loans for the building of new houses remained low at 371 newly granted mortgages.
90% of all loans within the month had 70% loan to value borrowing and in total 41% of all house sales had some level of credit granted.