Housing loans stood at €510.422 billion in January, 2.844 billion less than the previous month, according to the Bank of Spain.

The hole that inflation has left in consumers’ pockets was reflected in January in a notable drop in housing and consumer loans to Spanish families. The loss of purchasing power has become one of the biggest challenges for banks, which have begun to be more punctilious when granting loans which, moreover, have become more expensive in the heat of the rise in interest rates of the European Central Bank (ECB).

The aim is to keep non-performing loans (NPL) at bay, having managed to keep them below 3.5% on average despite the economic difficulties resulting from the energy and price crises. So, the requirements for accessing a loan are getting higher and higher. And the profile of the applicant is increasingly scrutinised.

According to data published on Wednesday by the Bank of Spain, housing loans stood at €510,422 million in January, which implies 2,844 million less than the previous month and 4,180 million less than a year ago, after seven consecutive months of declines.

These falls are associated with the slowdown in housing sales, given the sharp rise in the Euribor, which closed February at 3.52%, increasing the price of variable rate mortgages already signed and also new loans in the sector. A rise in prices that is slowing down the purchasing decisions of future homeowners.

Figures from the Bank of Spain indicate that the amount that households spend on housing still accounts for the largest part of all their debts, approaching 73.5% of the total.

Fall in consumption

Loans for accessing a home have not been the only ones to notice a certain slowdown at the start of the new year. Data from the Bank of Spain indicate that household consumer loans fell in January to €95,651 million, down from €96,687 million the previous month.

The figure, however, is still higher than the €92,046 million a year ago, showing that Spaniards have had to resort to this type of loan more forcefully in recent months to meet their expenses.

On the other hand, household borrowing for other purposes amounted to €86.32 billion, down from 89.03 billion a year earlier and around the same figure as the previous month (86.18 billion).

Original Story: El Correo |Clara Alba
Photo: Photo by Svilen Milev in FreeImages
Edition and translation: Prime Yield