Mortgage lending in Spain rises

Mortgage lending rises for the first time in two years

According to the National Institute for Statistics (INE) 52,043 mortgages for the purpose of buying a house or flat were conceded by banks and building societies in November 2009. This constitutes an increase of 1.8% compared to November 2008.

This is the first time in two years that mortgage lending on houses or flats has increased following 28 consecutive months in which year on year decreases were registered. Mortgage lending has fallen almost continually since January 2008 with falls of up to 20%.

The number of mortgages in November fell by 0.7% while the fall in mortgages has reduced to just 23.3% compared to last year. According to figures published by INE the average price of a mortgage fell by 11.7% in October 2009 compared to October 2008 and is now 115,492 euros.

Building societies conceded the highest number of mortgages in November accounting for 52.5% of the total, banks accounted for 36.

6% followed by other financial entities which accounted for 10.9%. As far as the amount of capital lent building societies lent 45.3% of the total, banks 43% and other financial institutions 11.7%.

The average interest rate for mortgages taken out in November 2009 was 4.09% which is 26.7% lower than a year ago and 2.4% lower than October 2009.

The average interest rate conceded by building societies was 4.25% and the average terms were 23 years while the average interest rate conceded by banks was 4.03% repayable over 21 years.

Most mortgages taken out in November (95.2%) were on variable interest rates while only 4.8% used fixed rates. The Euríbor was the most popular interest rate and was used for 88.7% of new mortgages.

The number of mortgages per 100,000 inhabitants was highest in Cantabria (324) and La Rioja (295).

Madrid and the Balearic Islands presented the best variable rates with increases of 28.4% and 26.6%, respectively while the worst results were seen in La Rioja (- 40.3%) and Murcia (-16.2%).

The highest priced mortgages in November were in Catalonia (179,984 euros) and in Madrid (179,959 euros).

Lastly the highest number of mortgage holders who changed the conditions of their mortgages per 100,000 inhabitants were in the Comunidad Valenciana (234) and La Rioja (171), while Murcia and the Comunidad Valenciana registered the highest number of cancellations in mortgages per 100,000 inhabitants (173 and 174 respectively).