Door opening up on Spanish mortgage deals
The Spanish property market, aside from the glut of surplus property, has suffered as a result of restrictive lending practises, adopted by the banks who had previously lent to all and sundry.
Now that the banks have no customers and a huge stock of repossessed properties, getting their newly acquired assets to work for them has meant a change of policy. In a bid to boost property sales in Spain, loan to value deals have started to change as has the approach to providing these deals to foreign investors.
Up until recently, the typical LTV has been around 75%; now 85% deals are common, even up to 100% in some cases, although these tend to be tied to particular developments. Bancaja Habitat, a pioneer of the high LTV deal, is reporting a lot of investor interest, particularly from UK investors looking for a property in Spain, who got first hand details of the loans at last week's A Place in The Sun expo.
Banks now have to take the initiative to get the market moving and deferred mortgage payments of 3 years on some of the deals is a real eye catcher for some.