The credit crunch and rising mortgage default rates in Spain (which, it should be pointed out, are still close to historic lows), are making Spanish mortgage lenders ever more cautious about whom they lend to. The Spanish financial daily Expansion reveals that 6 out of 10 mortgage applications are being turned down, compared to just 4 out of 10 a year ago. Developers have taken to blaming mortgage lenders for killing the market by turning down too many mortgage applications.

Average mortgage default rates presently stand at 1.12%, up 60% in 12 months to the highest level in 7 years, and expected to rise significantly in the near future. Even so, they are not far off historic lows of less than 1% in recent years, and far from the 8% level reached in early 90s.