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35% of Spaniards wish to own a property this year

There is no denying that the demand for property is on the rise. As per the data provided by INE, over the past year, the number of property purchases in Spain significantly increased compared to the previous year. This suggests that the upward trend will continue to be evident during 2018.

Something similar has happened with those who intend to buy a property in the near future. According to the survey carried out by the HelpMyCash website in which more than two thousand Spaniards participated, it appears that 17% of citizens will plan to buy a property in 2018 and 18% are thinking about it. 

According to the previous data, 35% of consumers want to buy a house in 2018, compared to 65% who do not want to do so, at least not at the moment. However, it must be clarified that out of the 65%, 59% of them belong to those who already own their own home, compared to 41% who do not own any property.

The truth is that according to the data published by Fotocasa, in 2017 the figure of 470,000 propery purchases exceeded the expected numbers, which means an annual increase of 15%. With respect to 2018, the property purchase figures are expected to surpass 500,000. Similarly and whenever the Euribor is negative, it is believed that given the effort of the banking and the new mortgage law, mortgages will be granted at a fixed rate in 2018.

Madrid - El 35% de los españoles quiere comprar una casa este año

Who shows greater purchase intention?

The greatest purchase intention has been shown among young people, specifically people between 26 and 35 years of age. 21% of those taking part in the survey and belonged to this age group say that they will buy a property this year. This is compared to the 19% who say they are not too sure and are thinking about it at the moment.

18% of the youngest age group, that is those who belong to the 18 to 25 years, affirm with certainty that they will buy a house, as opposed to 23% belonging to the most undecided. People aged between 36 and 45 have a purchase intention of 17%, compared to 20% among ambiguous and doubtful.

The last group, that is people over 46 years of age do not have as much desire to buy a home. The percentage of those who are certain about their decision in this group is decreasing to people over the age of 66, whose purchase intention is not so transcendental.

To summarise all the above points, it can be said that the most potential consumers i.e. those who show the greatest interest in buying a property, are those who belong to the 26 to 35 age group. On the other side of the scale would be people over the age of 46, whose percentage drops to reach those over 66, whose number is practically residual.

Do Spaniards have enough savings to buy a home?

Many Spaniards want to become property owners in 2018, however, their savings are not enough to fulfill such a wish. When it comes to buying a house and applying for a mortgage, you must have enough savings to be able to cover 35% of the total value of the property in question. The 20% relates to the deposit that must be paid in advance as it allows you to borrow less, while the remaining 15% is towards the property's purchase fees and taxes. 

These figures are too high and most consumers do not have such savings in their bank accounts. In fact, 64% of respondents who intend to buy a home in 2018 claim to have less than €10,000 saved. In contrast, 30% of respondents have a figure of around 10,000 and 50,000 euros. Only 6% have a higher amount and can cover the deposit, all the purchase expenses, and the mortgage payment without any problems. 

Consumers who do not have sufficient means, but do intend to buy (64% of respondents), must change their financial situation and increase their savings if they want to take a step on the property ladder. As a rule, banks only tend to finance 80% of a house, except in the case of properties that are owned by the bank, in which case they can finance one hundred percent. In this way and as an explanatory example, when buying a house worth €150,000, you must have €50,000 of savings.

Some people have started to take their decision very seriously and are saving as much as they can. In fact, those who manage to save more than €300 per month are the ones with the greatest purchase intention. They are followed by those who save between €200 and €300 per month and finally those who save a lower amount are the ones who have a much lower purchase intention.

Fixed or variable mortgages? That is the question

Consumers who are changing their status from tenants to owners have to take out a mortgage. According to analysts, variable-rate mortgages will have a sub-zero Euribor during 2018. At least during the first three quarters because it seems that in the last months of the year the rate can change. As for fixed rates, the monthly mortgage payment could increase slightly in 2018. The truth is that the popularity of fixed rate mortgages has increased and now they are part of 35% of new contracts. In fact, it is expected that they will continue to have the same success in 2018.

The best fixed rate contracts are those that start with 1.90% in a 20 year term. Although at present, some have higher interest, they are free from expenses and commissions. There is no cost to apply for a fixed rate loan and sometimes the eligibility criteria is minimal. In fact, you may only need to show your wage slips. 

In summary, consumers who decide to apply for a variable rate mortgage in 2018 will be pleasantly surprised, at least during the first quarters of the year, as the Euribor is expected to continue in negative figures. There is no doubt that the interest rates will be attractive, although at the end of the year, these loans could become more expensive. In terms of fixed interest rates, the upward trend experienced by banks in 2017 will be consolidated in 2018. There may even be a greater boom driven by the mortgage law that precisely aims to make these loans even more appealing. 

The new Government Housing Scheme 2018-2021

The government is intending to encourage property sales after a time when citizens lost their right to certain tax incentives and the help to buy scheme generated in the past. 
  
Four years have passed and this time the grant in the Housing Scheme 2018-2010 returns to make another appearance. These incentives seek to benefit a segment of the population that has less chance of buying or renting a property due to the current job insecurity and the difficulty in obtaining loans. 
 
These grants are intended to satisfy certain housing needs, in terms of renting and purchasing, refers to those young people who can not afford the monthly payment. Thus, the scheme that will be approved in 2018, offers assistance to those who are interested in buying or renting a home and do not have sufficient financial means at their disposal.

Who can benefit from this scheme?

A good number of buyers are in a situation to move to a new home, that is, many families who want to sell their homes and buy a new one. However, some experts believe that the property market could get damaged again. In order for this not to happen, the new generations must become property owners, this is why the housing scheme contemplates a series of grants with which the eligible buyer can come up with a deposit of 20% of the value of the house with a maximum of 10,800 euros. 
 
This initiative will allow young people under 35 years of age to meet the initial expenses of the purchasing process (registration, notary, taxes, etc.). The Minister of Development, Íñigo de la Serna, announced the measures of this scheme to the press, confirming that it will come into force from January 1st. 
 
Young people under 35 years of age who have an income of less than €1,600 per month may qualify for this help to buy scheme. The only conditions will be: not to own another property and to reside in the purchased property for a minimum period of five years. 
 
These grants could greatly encourage young people by increasing property purchases in 2018. They will not only benefit from this new scheme's grant but people over 65 years of age will also receive up to €200 a month to help pay their utility bills (gas, electricity, water and communal charges).
The largest beneficiaries of this scheme will not be able to collect a pension that exceeds three times the Minimum Interprofessional Salary. In addition, the scheme has further incentives for private companies and public bodies responsible for building homes for seniors.

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