Loans increase in Tenerife and Spain as property prices become more affordable
The number of new Spanish property mortgages approved in May rose by 15per cent to 57,614 compared to the previous month, indicating that demand for property in Spain and Tenerife is rising, according to Spain’s National Institute of Statistics.
However, on an annual basis the volume of mortgages issued in May fell 23per cent, compared to the corresponding month last year.
The average mortgage value in May fell 14per cent to €121,120 (£102,560) year-on-year, but rose 5per cent month-on-month potentially reflecting the fact that cheaper properties in Spain and Tenerife are now available.
Overall new mortgage lending was €7bn, down 33per cent year-on-year, but 20per cent higher than April.
The average interest rate agreed for new mortgages in May was 4.6per cent, 11per cent lower in percentage terms than a year ago, and 2.2per cent lower than the previous month.
The majority – 96per cent – of all Spanish mortgages secured were on a variable rate, with the other 4per cent fixed.
Things have certainly loosened up from 12 months ago when literally nothing was happening in the Spanish Mortgage market.
However, it is still not easy, nor straightforward for non-residents to obtain a mortgage.
The problems are exacerbated in Tenerife where local branch managers simply will not sign off on what they see as risky loans (anything above 60%) so we end up with a situation where buyers in Tenerife mistakenly believe they can only borrow 60% of the purchase price.
Truth is (get ready for the plug) we are able to obtain 80% of purchase price for many of our clients although it certainly is not easy and the same company who offer us 80% will, if approached in Tenerife, offer YOU 60%.
We wouldn’t usually blow our own trumpet so readily but considering what else buyers in Tenerife are faced with – we always have been and are very good at obtaining mortgage in Spain.
Its just a shame that most agents in Tenerife (as opposed to mainland Spain where most of our business is) are way too blind/stupid/greedy to appreciate the professional service that we provide….