Number of Spanish Mortgages approved plummets

 

The number of Spanish mortgages issued during April of this year dell by 38.2% compared to the year previously, the National Institute of Statistics (INE) commented in a report issued earlier today.

The fall represents the largest seen since April 2009, when buyers backed away from the real-estate market after the property crash of 2008. The value of mortgage lending for April 2011 slumped 45.1% from a year earlier, the largest fall in over two years.

The rate of unemployment, currently standing at 21%, undoubtedly means than there are many who are simply not in any position to commit to a mortgage, and thousands more who dare not take a risk at a time when employment is so uncertain.

According to Spanish property portal Idealist, the number of repossessed and distressed properties has multiplied by ten since the crash 2008.

The fall in both mortgage approvals and house prices has been put down to the government's elimination of tax incentives for property purchases, just one of Prime Minister José Luis Rodríguez Zapatero's austerity cuts, intended to address the widening national deficit.

The INE also explained that the increase in IVA has discouraged many buyers.

Property prices fell for the 12th consecutive quarters as of March 2011, equating to a 15% fall on values recorded at the peak of the market in 2008 before the market crashed, the INE reported last week.