January Spanish mortgage approvals hit five-year high

Spanish banks’ willingness to lend is an encouraging sign of a strong economy and property market.

Recent data published last week by Spain’s National Statistics Institute (INE) has revealed that there were 27,240 new mortgages issued in the country in January – the most in a single month since January 2012.

This figure was also a 16.9% increase on January last year, and mirrors other data published so far this year that suggests 2017 will be an even stronger 12 months for Spanish property than 2016…

The INE data shows that the average loan capital taken out in January was €112,844, which is an annual increase of 6.4%. Again, this figure points to a growing confidence in the Spanish economy and property market by leading banks, with more and more now willing to loosen their lending criteria.

Equally, it shows that the average buyer is now slightly better-off financially, be they native Spaniards or foreign buyers. Of the mortgages taken out in January, 36.8% were fixed-rate mortgages set at the Euribor rate – an attractive option particularly for younger buyers who maybe have a smaller deposit.

Across the country, 16 of Spain’s autonomous regions saw a year-on-year increase in mortgage activity in January, with only Castilla y León bucking that trend. The largest growth was seen in Galicia, Asturias and the Balearics, where the number of mortgages issued in January this year was more than 30% higher than those issued in January last year.

If the last 12 months are taken as a running total, Spain’s mortgage data shows a 14.6% increase on the previous 12 months, with 285,000 new mortgages issued in the past year.