UK Buyers Dominate Mortgage Applications in Spain Despite Brexit Fears

Despite concerns of a post-Brexit slowdown, UK buyers led in mortgage applications for Spanish homes in 2023, according to online platform Hippo.

Despite concerns about a potential economic slowdown post-Brexit and the impact of rising interest rates, UK buyers have continued to dominate mortgage application requests for home purchases in Spain. According to the online mortgage platform Hippo, the number of applications for home financing by non-Spaniards in 2023 was 7% higher than the previous year. The data reveals that 40% of the foreign mortgage applications originated from the UK, followed by Switzerland at 25% and Germany at 18%.

The majority of the applications, 62%, were from 'non-resident' individuals looking to invest in property in Spain for profit. The remaining 38% were from non-residents seeking to purchase a second home, either for permanent residence or as a holiday getaway. Non-resident customers accounted for nearly 20% of all mortgage requests on the Hippo portal, with an average financing amount of 65% of the home's purchase value (LTV) and a maximum debt ratio of 30% for these customers. The average monthly income per family unit was reported to be €6,500, with an average mortgage amount of around €195,000. The study also indicated that the average price of a potential purchase stood at approximately €300,000.

Among the preferred regions for non-resident home purchases, the Valencian Community emerged as a popular choice, with Alicante province leading the way at 55%, followed by Valencia at 40% and Castellon at 5%. Catalunya accounted for 19% of the total non-Spanish applications, while Andalucia and the Community of Madrid secured the third and fourth positions, respectively. The Mediterranean coast remained the top choice for property buyers, with over 50% of applications concentrated in this area, catering to both private use and investment purposes. In contrast, the inland regions of Spain attracted more interest from real estate speculators.

Despite uncertainties in the economic landscape, the demand for property in Spain among non-resident buyers, particularly from the UK, remains strong. The data from Hippo's online platform underscores the continued appeal of the Spanish real estate market for international investors and second-home buyers.