Mortgage borrowing falls for the first time in 16 years
According to the Bank of Spain, the amount of money that Spaniards owe financial institutions for their mortgages fell by 0.05% between July and August this year. In August Spaniards owed 1.058.304 million euros for their mortgages – 500 million less than in July.
This percentage fall is not spectacular and points to a stagnation in the housing market and changes in tendencies which contrast to previous years. During 2007 mortgage borrowing grew at a rate of 15.27% and in 2006 it grew by 24.54%. However, the fall is significant due to the fact that since the Bank of Spain has been collating these statistics mortgage borrowing has only fallen on two previous occasions (January 1992 and January 1988).
The warning arrived yesterday from the Spanish Mortgage Association (la Asociación Hipotecaria Española – AHE) which has been collating similar statistics since 1992. It registered the first fall in August since January this year.
AHE stated that the cause of the fall in mortgage borrowing was down to the fact that the rhythm of paying off mortgages continued at a steady rate while the number of new mortgages conceded has gone down due to the negative effects of the financial crisis.