Valencia’s Gov’t Incentivises Homeowners To Rent Out Vacant Properties

16 March 2017 – Cadena Ser

The Valencian Generalitat will pay insurance to families and other people who let out the vacant homes they own. The measure forms part of the new Law for the Social Role of Housing, which entered into force at the beginning of this month. In addition, the regional government is also planning to impose sanctions on banks that do not offer up the vacant homes that they own for social housing purposes.

The Councillor for Housing, María José Salvador, visited Castellón yesterday, where she explained the main aspects of the new Housing Law in the Community of Valencia. Salvador highlighted that the Law’s objective is to incentivise the rental of properties owned by individuals that are not currently occupied.

To this end, the regional government will pay insurance to protect homeowners in the event that tenants fail to pay their rent or damage properties. On the other hand, the Councillor for Housing said that the new law provides for the imposition of sanctions on banks that do not hand over their vacant homes. Salvador said that the banks should report the homes they have vacant to avoid conflicts and possible fines. Unlike individual owners, the banks will not be covered by any insurance policies paid for by the government.

Even though the Law for the Social Role of Housing only entered into force two weeks ago, the Council has already opened several meeting points, both physical and digital, where interested parties can obtain more information about the initiative.

Original story: Cadena Ser

Translation: Carmel Drake

Gov’t To Modify Legislation For Home Buyers’ Insurance

12 May 2015 – Expansión

The Government is going to modify the insurance (legislation) that covers payments made by house buyers against possible breaches by property developers.

The Popular Party has presented an amendment in Congress to the Law for the Regulation and Supervision of Insurance Companies to modify its coverage, which (to date) “has not been sufficient to address the deficiencies that prevent effective protection for buyers, including advanced payments for these purchases”, says the justification for the amendment, signed by the PP.

The governing legislation requires that property developers take out collective insurance policies, through insurance bonds, and then subsequently sign individual policies with (house) purchasers.

But in practice, these second policies are not being signed and the coverage for buyers is not working. Several changes are being introduced “to eliminate this false appearance of insurance”, including the requirement to deposit advanced payments in a special account managed by credit institutions, where the funds may only be allocated to the property developer concerned.

The Law for the Regulation and Supervision of Insurance has completed the first stage of the parliamentary process and has now moved onto the Senate. This law transfers EU legislation (Solvency II) into Spanish legislation and is expected to come into force on 1 January 2016.

Original story: Expansión (by E. del Pozo)

Translation: Carmel Drake

Santander Reduces Its Mortgage Spread Further, To 1.49%

18 March 2015 – Expansión

The second reduction of the year / The entity has decreased its spread over euribor on its mortgages from 1.69% to 1.49%, to match ING’s offer.

Santander has reduced the cost of its mortgage once more to place its product amongst the most attractive in the market, as the all out war continues in the sector. For the second time this year, the group has reduced the interest rate on its home loans: the rate paid (by borrowers) during the first year hereby falls from 2.45% to 2%; and from the second year onwards, the spread over euribor decreases from 1.69% to 1.49%.

With this move, Santander is now positioned in line with the strategy of (many of) its competitors such as ING, Bankia and Bankinter, which have all lowered the spreads on their mortgages to around 1.5% over the last month and a half. However, it does not match the rate of 1% being offered by Kutxabank, the lowest in the sector.

To obtain these conditions, clients must hold various products with the bank. Mortgage holders will have to receive their salaries in their accounts with the entity and they must earn a minimum monthly income of €2,000. In addition, mortgage holders must pay three bills (direct debits) from their Santander accounts, use the bank’s cards, and also take out home and life insurance policies with the entity.

Mortgages have become a key product for Santander in its efforts to achieve its main goal: namely, to increase the loyalty of its customers. Mortgage (marketing) campaigns targeted at individuals and Project Advance, which focuses on SMEs are the ‘hooks’ with which Santander is seeking to attract and retain customers in Spain, which currently number 12.6 million.

The entity’s mortgage portfolio in Spain amounts €47,000 million. Although the new loan book grew by 64% in 20134, its total stock decreased by 5.8% last year, from €50,000 million at the end of 2013.

Santander holds a market share of 10.2% in the mortgage sector in Spain, having gained 0.2 points between January and November 2014, according to the latest data presented by the bank. This falls below its market share of the Spanish loan sector (in general), which amounts to 13.5%.

Original story: Expansión (by M. Martínez)

Translation: Carmel Drake