NEW MORTGAGES RISE BY 7PC IN JUNE

These figures, from Spain’s National Institute of Statistics, also reveal that accumulated new mortgage signings were down 31% in the first 6 months of the year compared to the same period last year.

For example, just a few weeks ago, Santander and La Caixa, Spain’s biggest bank and savings bank respectively, signed agreements with Spain’s Association of Promoters and Builders (APCE) to keep the cement mixers turning on developments that are not yet finished, even if developers have run out of money. They want those developments finished bad, so to speak.

By value, new mortgages in June fell 6% year on year, but rose 4% month on month.

The average value fell 10% year on year to 142,700 Euros, but was up 5% on the previous month. In some regions, especially those where property prices are highest, the fall was more drastic. Average mortgage values fell 19% in Madrid, and 25% in Barcelona.

Average mortgage values are also down heavily in popular holiday home destinations like Malaga (Costa del Sol), down 24.5%, and The Balearics, down 30%.

The average interest rate was 4.47%, 13.8% lower than a year ago and 2.9% lower than the previous month. This figure shows that banks are passing on only a fraction of the fall in base rates to customers. Base rates are down 70% compared to June last year.

The average monthly mortgage payment has fallen from 845 Euros in June 2008, to 702 Euros today.