The Bank of Spain throws a jug of cold water at the proposal of Ana Botín and the real estate sector to promote the granting of mortgages to young people with the backing of the State. The agency has not yet received any invitation from the Ministry of Economy or the financial sector to analyze this measure, which Santander itself insists is preliminary.

However, sources close to the financial supervisor consider that a proposal of this magnitude would need to be studied carefully and this makes it unfeasible that it was approved to reactivate the economy in the short term as requested by the first Spanish bank.

The initiative promoted by the entity and associations of real estate developers would imply that the banks gave mortgages for up to 95% of the value of the property as long as the ICO guarantees 20% of the risk. The measure would mean going back to the times of the real estate bubble in terms of the percentage of financing delivered to households, since at that time it was 100%. Today that range has dropped to around 80-70% of the value depending on the applicant's risk profile and the term of the loan itself.

Sources close to the Bank of Spain explain that since it is a new measure in Spain, similar to the 'Help to buy' in force in the United Kingdom since 2013, its application would require a rigorous and slow analysis of the impact it could have on the financial sector and the increase in public spending.

The employers' association AEB, which brings together the main banks in the country, has picked up Santander's proposal and is now going to be commissioned with the approval of the sector to carry out contacts with the Economy and the ICO to define its possible design and application.

In the rest of the banks, they do not renounce a measure of this magnitude and consider that it would be positive to encourage the declining national mortgage market, although they doubt that it is a priority at this time given the economic uncertainty and recession in which the country is mired.

However, sources from these entities stress that youth access to housing is a structural problem in the country and call for urgent measures to alleviate it, such as accelerating the construction of 20,000 public homes to which the Ministry of Public Works pledged to José Luis Ábalos directs.

In accordance with the criteria of The Trust Project

Know more

  • Santander
  • Spain
  • José Luis Ábalos
  • United Kingdom
  • Mortgages
  • living place
  • Settlement

FinanceBanking takes advantage of State guarantees to clean up the risk it had in Catalonia

Economic NewsThe new bank reconstruction after the coronavirus crisis

CoronavirusCrisis in families: 385,000 requests for credit deferrals in one month