June 26, 2020 / 9:13 AM / 18 days ago

Spaniards took out 18.4% fewer residential mortgages in April

MADRID, June 26 (Reuters) - Spaniards took out 18.4% fewer house mortgages in April, Spain’s first full month under one of Europe’s strictest coronavirus lockdowns, compared with the same period last year, data from the National Statistics Institute showed on Friday.

The average amount of capital loaned out per mortgage also fell 18.5% compared with March, when Spain entered confinement. The average mortgage value fell 9.5% by the same measure, suggesting lenders were risk-averse and borrowers less solvent or ambitious. (nL8N2D84J4)

Lockdown measures prevented individuals from conducting property visits, relying on public notaries - who were only permitted to practise in emergency cases - while banks drastically cut back on consumer funding. (nL5N2CB81A)

The value of mortgages for urban properties and apartments in April dropped the most from March, slumping 10.2% and 2% respectively.

Loan value for rural properties, however, actually increased 16.4% in April month-on-month as interest shifted to countryside homes, a trend borne out in search preferences on property portals.

Analysts predicted the near standstill in Spain’s economy would directly affect banks’ mortgage books, which account for 40% of their credit portfolios, or around 500 billion euros ($551 billion).

State-owned Bankia, one of the country’s most-exposed lenders to mortgages, said its new mortgage lending fell around 60% in April from March, though it expected a post-lockdown recovery.

To mitigate the impact of the epidemic, which led to hundreds of thousands of job losses, the government approved mortgage holidays in March. (Reporting by Clara-Laeila Laudette; additional reporting by Jesus Aguado; editing by Larry King)

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