Mortgage guarantees for young people will be used for houses up to 157,000 euros

The living place it has become the center of political debate with the recent series of measures announced by the Government in this area. Among the most controversial — due to the express rejection of the coalition partners — is 20% guarantee that the official credit institute (ICO) will allow young people and families with dependent children to pay an advance payment for the first stay. This is exactly one of the big problems that young people face when they think about becoming a home owner. In other words, they can take on the mortgage payment, but not the huge outlay involved in a down payment on a home, given the difficulty in saving. However, these guarantees will not imply, far from it, that the banks will be more lenient with theirs mortgages. Nor that you can buy a house at any price.

The idea is that the beneficiaries of the support do not take on too much debt so that the entities do not face delinquency problems in the future. Therefore, the Government is asking for a formula that this guarantee applies only to apartments that have a price that, among other things, does not imply that the owner allocates more than 30 percent of his salary to pay the monthly fee.

The government has already indicated this the maximum house price will be determined by territory. And taking into account that factor, an approximate calculation can be made of what the maximum price of a house would be that could be accessed by a young person under the age of 35 who enters the measure of the established gross annual limit of 37,800 euros.

According to the estimates of Helpmycash experts — which are indicative in any case — The most expensive home this profile could afford would be 157,334, with an average loan of 3.5% for a term of 30 years (always taking into account this premise of the possibility of setting aside 30% of the income for mortgage repayment). The ability to pay would increase to 314,668 euros if we are talking about a couple in which two members are under 35 years old, by doubling the salary limit that the Government established in its plan. In any case, even in that case, the banks will decide to whom they will (or will not) give the mortgage.

“No matter how much guarantee is available, if the client does not prove to be solvent, he will not be granted a 100% mortgage,” the financial sector explains. In other words, the entities will manage risk as in their usual daily business, precisely at the time when, according to all bank loan surveys, increasing requirements are imposed when granting loans. “The tightening of loans to companies and for the purchase of apartments was stronger than banks’ expectations in the previous quarter and indicates a permanent weakening of credit dynamics,” the European Central Bank recently admitted.

According to the registrar’s data, On average, an apartment in Galicia cost a little more than 132,000 euros last year; more than 188,000 in Spain.

Structural “serious crisis”

Spain is suffering from a “long and structural housing crisis of serious proportions”, he warned this Wednesday The European Councilwhich confirms that it exists “urgent need” for more social and affordable housing. This disadvantage has been exacerbated by the decision of some governments to allow investment funds to buy homes, which has led to a rise in prices rentsit is stated in the report of the Commissioner for Human Rights of the Council of Europe, Dunja Mijatović, after her visit to Spain in November last year.

In addition, the escalation of real estate prices “far exceeds” the growth of purchasing power, adds Mijatović in the document, in which he points out the “worrying” lack of social housing due to years of poor public investment.

It acknowledges that this problem has been “partially addressed” by the Government’s Recovery Plan 2021 and the National Action Plan for Housing Access 2022-2025. In this regard, he believes that if these two are “correctly applied” they can offer guidelines for creating a social and affordable housing offer.

The report was prepared before approval at the end of April at the Congress of Deputies Law on the right to housingand that is why the commissioner considers now it is “important” to adopt it “as soon as possible”.