Total value of mortgage loans outstanding stagnated in June, rising by just 0.9% year on year, the smallest growth since present records began in 1995, according to figures released by the Bank of Spain. In comparison, overall mortgage lending grew by 8% in June last year, before the credit crunch really started to bite.
The value of all residential mortgage loans outstanding in June was 670 billion Euros, 3 billion Euros less than in January, but fractionally higher than the same time last year. The value of outstanding mortgages has fallen every month this year, and is now 4% lower than it was at the start of the year.
Why is this interesting? Because mortgage finance is the lifeblood of the property market. If the pool of mortgages is stagnating or declining, that means less money around for buying homes. Go figure.
At the hight of the property boom, the value of outstanding mortgages was growing at around 25% a year.
June was also the first time since records began that the value of consumer loans has actually fallen too, as more Spanish residents paid off debt than took it on.