Q3 was a record breaking quarter for Mortgage Direct. We have noticed a drop in enquiries so far this month which may be due to some uncertainty in the markets although it’s still too soon to tell. Some potential clients feel a price adjustment is imminent although we are unsure how significant this will be as the market in Spain is still very strong.
We were at a renowned international property fair in the UK last month and out of the 7,000 paid, exhibition visitors, around 65% were interested in Spanish property. Being on the ground and speaking with these people, it was evident they still wish to pursue their dream of buying in Spain.
Additionally, the General Council of Spanish Notaries has published figures for Q1 & Q2 2022 showing an increase in foreign buyers of almost 53% compared to the same period last year. If this demand for Spanish property continues, we don’t feel that prices will fall. It was speculated that prices would drop during the pandemic but in fact they rose by 1.6%.
With interest rates rising worldwide and lifestyle choices changing since the pandemic, Spain is still very much on the radar as the place to buy. In December last year, the Bank of England increased the base rate for the first time since the Covid pandemic. It has since increased the rate a further six times and a typical five-year mortgage deal is now over 6%.
We are seeing a shift in fixed rates in Spain too; some banks are moving away from full term fixed rates and offering a mixed rate such as five years fixed followed by the variable rate. Having said this, we can still achieve long term fixed rates and are able to achieve a 3.75% fixed 10-year deal on a €150,000 loan from one of the main lending banks, and 3.8% for 25 years. Even if life cover is not selected, these rates only rise to 4.85% and 4.9% respectively which are still very reasonable. No wonder the visitors at the exhibition said Spain is the place to be!