Why Getting a Mortgage in Burgos is More Complicated Than Ever Before

This hardening is one of the arguments that could partly explain the decrease in the number of mortgages constituted. According to INE data, in March of this year, 316 mortgages on homes were signed in the province of Burgos compared to the 376 that were constituted in the same month of 2022. However, the results of a recent survey carried out by the real estate portal pisos.com reveal the opposite.

The director of Estudios de pisos.com, Ferran Font, explains that based on the answers offered by those surveyed: «60% of those who are not going to become owners of a property this year say that the increase in mortgage prices and the hardening of the conditions have not conditioned his decision ». For the expert, the data is revealing, “since one of the reasons that are being used to justify the possible drop in sales this year is based on the consequences in the mortgage market that the ECB’s change of position is having,” he points out. .

Be that as it may, the truth is that the Bank of Spain itself recognizes that the criteria for granting loans to households for home purchase have turned upside down. The organization recognizes that behind this evolution would be, among other things, the increase in the risks perceived by the entities -not only related to the real estate sector, but with the economic perspectives in general-, a lower risk tolerance on the part of the financial entities, higher financing costs borne by banks, less availability of funds and a worsening of the solvency of borrowers.

The direct consequence of this hardening is a greater number of rejected operations, but there are still more. The concession criteria are not the only thing that complicates access to financing, the conditions applied to these mortgage loans have also changed, starting with the increase in interest rates. He rise in mortgages It means an increase in its price and, consequently, greater pressure on borrowers who, in the best of cases, must have a higher income to be able to pay the loans and demonstrate sufficient job stability to convince the bank that they are suitable for signing the mortgage.

For the spokesman for pisos.com, “the rate hikes applied by the European Central Bank mean that financing is no longer as cheap as before, but the entities are taking charge of reconfiguring the mortgage offer because they have to continue attracting clients: it is the key to your business. In any case, the expert indicates that “the inflation that families must endure in their day-to-day life is another powerful reason to delay real estate purchases.”

A stable market

The Burgos real estate market is far from being one of the most affordable in the community. In fact, after Segovia (€1,255/m2), Salamanca (€1,373/m2) and Valladolid (€1,459/m2), it is one of the most expensive. However, contrary to the rest of the provinces that lead the price ranking -where the increases are above 2.5% and even 4% in the case of Valladolid-, second-hand housing has barely revalued in Burgos by 1.74% in the last year. The sales price report prepared by pisos.com corresponding to March reveals a similar situation at the capital level, placing the Burgos price at €1,743/m2, which represents an increase of 3.52% for prices.

In a national key, Font acknowledges that “the increase in the cost of loans for the purchase of housing will still take time to lower the momentum of demand enough for this withdrawal to impact residential sale prices.” However, he points out that “the defensive value of this asset becomes relevant at a time when leasing is expanding and becoming more tense with those who cannot buy and agree to be long-term tenants, but also with those who can buy, but they prefer to wait for better conditions.”