THE number of new mortgages registered in Spain has taken a dramatic nosedive compared with the previous year.
This August there was a 29.9% decrease on the same month in 2018.
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The data released by the National Statistics Institute (INE) reveal that the uptake in mortgages for the eighth month of the year was also the worst since 2015.
In total 20,385 new mortgages on houses made it onto the Land Registry in 2019.
Of Spain’s 17 autonomous communities, La Rioja experienced the most negative mortgage drop off, with a decrease of -61.5%.
The regions with the next largest slumps were Extremadura (-53.8%), Navarra (-52.9%), the Canary Islands (-49.7%), Balearic Islands (-42.5%), Madrid (-37.6%) and Andalucia (-34.4%).
The poor mortgage data has been blamed on Spain’s new property law, which was implemented this summer.
Article 20 of the Real Estate Credit Act was enacted by the Spanish Government in June, and according to the INE, ‘could have affected data published in August’.
The new law makes it more difficult for expats seeking a mortgage if they are not in the eurozone, specifically, if they derive their incomes in a currency other than the euro.
This is because the borrower has the right to convert the mortgage into their own currency, under certain circumstances, at a later date.