Property buyers bypassing banks

Over six in 10 homes in Spain were purchased without a mortgage in the first quarter of this year, suggesting that the housing market is far from on its knees and not everyone has been hit by the recession.

According to the General Council of Notaries, a total of 60.8 per cent of buyers dispensed with mortgage-lenders when buying properties between January and March inclusive.

But not all of these were bought outright in cash – many purchasers bypassed the banks by taking out loans directly from the developer in the case of new builds or properties that have never had an owner, or took advantage of the 'rent-to-buy' scheme which many developers are now offering in a bid to get shot of their plethora of empty homes.

This way, they manage to avoid problems with trying to get finance from banks which are reluctant to lend money in the current economic climate, and do not have to worry about these entities repossessing their homes if they lose their jobs and cannot find work in time to save themselves from defaulting on their monthly repayments.  

This is good news. I think it can be safely said that we didn’t leave the banks, they left us. The high street banks have abdicated and are not the safest place to leave one’s financial assets. I like the joke about the man who, on receiving a letter from his bank stamped ‘insufficient funds’, wrote back, “you or me?” Many a true word said in jest.