Spain
Until the market began to collapse fi ve years ago, overseas buyers were spoilt for choice in Spain, with several international banks offering mortgage deals on attractive terms. These days, with the Spanish economy on its knees and its banks being bailed out by Europe, only a few Spanish lenders are left – and the deals are much less generous. According to Miranda John, most
prefer to limit themselves to around 50 per cent loan to value, though Marc Pritchard of developer Taylor Wimpey de España (TWE) says it is possible to fi nd lenders providing up to 60 or 70 per cent LTV, “always depending on the fi nancial situation of the buyer”. Most Spanish mortgages are
variable rate deals, with the interest rate reviewed every 12 months; typical rates are currently around 3.5-4.5 per cent for the fi rst year, says Pritchard. “But most TWE customers buy with cash – in many cases by remortgaging their UK or European properties to release equity.” However, mortgage brokers are
reporting growing interest in Spain. Conti, the overseas mortgage specialist, saw a 33 per cent increase in mortgage enquiries over May and June on the back of “excellent buying conditions and signs that the market is starting to bottom out”, according to director Clare Nessling. Leading lenders include La Caixa and BBVA. Location is key. The most generous
loans to value are available in the most popular, resilient markets with the greatest international appeal – the Balearics, Madrid, Barcelona, pockets of the Costa del Sol; other areas have been much harder hit. In particular, warns John, buyers should be cautious in regard to the attractive fi nancing deals available from banks trying to offl oad repossessed properties. These may involve higher LTVs, interest-only mortgages or low introductory interest rates. “It’s easy to be seduced by them, and some may be worth looking at, but you really do need to know the area and how far it’s blighted by repossessed developments.”
“The most generous loans to value are available in the most popular, resilient markets, with greatest international appeal – the Balearics, Madrid, Barcelona, pockets of the Costa del Sol”
THE BEST DEAL IN SPAIN?
Broker Viva Costa International has sourced a 25-year deal from a Spanish bank, at a variable rate of 3.49 per cent (12-month Euribor plus 2 per cent). It’s available for up to 70 per cent LTV.
www.vivacostainternational.com
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