Townhouses, Mayan RivieraSpanish bank agent Bancaja Habitat is attracting foreign buyers to its repossessed property stock with 85% loan-to-value mortgages.

Bancaja has sold around 40 units in the last three weeks to foreign and domestic buyers, who don’t have to start repaying the mortgage for three years.

The reluctance of Spanish banks to lend to foreigners at high loan-to-value rates is seen as a major obstacle to clearing the backlog of unsold and repossessed property in tourist areas. The number of new housing loans issued in Spain last year fell by 22%.

Since the start of the year, several banks have begun offering better mortgage deals and as much as 100% loan-to-value but often tied to specific developments.

“We’re still at a stage of the crisis where more stock is coming onto our books and the numbers are going up,” said Miguel Martínez-Mariño, country manager for Bancaja Habitat in the UK. “We have to take the initiative and ask what we can do to sell.”

So far most sales have been made in Spain, where the company has launched a nationwide advertising campaign across TV, radio and newspapers. But the agent is now hoping to attract to more British buyers and is also offering the deal through its Scandinavian offices.

Martínez said the mortgage offer had a positive reaction at last week’s A Place in the Sun exhibition in London. “We had around 70 enquiries and the majority of people were looking for finance. Their initial reaction to our deal was to ask ‘where’s the catch?’ They couldn’t believe it.”

Source: OPP

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