New regulatory housing policies will ‘moderately’ impact the Spanish property sector. Tecnotramit, one of the leading service companies for financial institutions and businesses in Spain and Portugal, considers both the Housing Law to be passed in the coming months and the latest Mortgage Law, which came into force 16th June 2019 by modifying the regulatory framework governing property credit contracts, have not affected the residential and mortgage markets too much.
‘The Housing Law is well intentioned, but will not have much impact. It is said new rental developments may discourage owners to rent, but first home purchases drive the Spanish market. And banks will not be affected when it comes to granting mortgages either. In addition, three years ago the Mortgage Law already established the rules of the game and redistributed the responsibility between financial institutions and notaries public when it came to clarifying background information to consumers about what is going to be signed,’ says Carles Solé, Tecnotramit’s Mortgage Loan Manager.
The expert adds: ‘The most important decisions in terms of transparency and legal certainty for the consumer were taken in 2016, resulting in a more solid and secure market for all parties.’ According to the Court of Justice of the European Union (CJEU), a significant portion of financing operations carried out before that year contained abusive clauses in mortgage contracts and a lack of transparency in the process of contracting and signing mortgages, which has led to a flood of legal claims over the past six years.
On the other hand, access to financing by the national buyer has continued to move within recommended parameters by financial institutions’ risk control departments, which for years have limited financing offered to 80% of the total value of the price of the purchased property. Meanwhile, foreign buyers have to meet a higher number of requirements in order to obtain financing even in the most financially sound cases.
In this context of relative stability and rising macro-statistical figures, Tecnotramit has recently forecast good progress and performance of the Spanish property and financial markets for the second half of the year in the same positive line recorded during 2021. It does so taking into account the low unemployment rate in Spain at a time when its financial institutions adapt to the current context and offer fixed rate mortgages that are still competitive, despite the EURIBOR rise.