Spanish Mortgages

Demand from foreigners for Spanish Mortgages has increased 95% during the first three quarters of 2014 compared with the same period in 2013.As the pound sterling hits a two year high against the Euro rising from 1.18 to 1.28 over the last 12 month, British buyers in particular have found themselves in a strong position. The low euribor to which most Spanish mortgages are linked has also helped raise enthusiasm in borrowing to fund dream holiday homes. Spain remains the undisputed first choice destination for holiday homes in Europe and with prices typically 58% cheaper than in 2007 now is the perfect time to invest. 2013 saw a rise of 16% in foreign investors compared to 2012.

Improving confidence in the Spanish economy together with the belief, backed by the Bank of Spain, that property prices have finally hit rock bottom and improved financing options are all factors helping to encourage sales in Spain. Agents are reporting 20% increase in sales on this time last year and bank figures show 19% increase in lending. Prices have actually risen by 1% in the last quarter,

The main difference between now and 2007 is that most buyers were buying speculatively with a view of selling in a couple of years for 20% profit. Now investors are looking for long term investments and using the rental market to make a profit. Any yield higher than 5% in considered noteworthy and anything producing 8 or 9% yield is considered a great investment. This together with the rise in property prices in Spain expected over the next decade makes good reading. Also back in 2007 most homes sold were new or off plan and the prices were non-negotiable. Now most properties are negotiable. However the new build market is steadily coming back with the ministry forecasting 37,000 new permits this year.