Price war among mortgage lenders seeking customers in Castellón

Head of the College of Economists in the province of Castellón, on the east coast just south of Catalunya says banks are offering fixed rates with nominal interest of as little as 2.5%.

Jaime Querol reveals that an 'excess of cashflow' in Spanish high-street banks, as a result of bail-outs, buy-outs and strict conditions imposed by the Central European Bank (BCE) means entities are seeking to 'go back to what they have been doing business in all their lives', or 'lending money'.

“They have a much more open outlook than a year ago, and have started a price war,” reveals Querol.

He says the College of Economists has seen a 'change in trend' in the past 12 months, but as yet this 'new attitude' has not translated into a 'notable increase' in housing purchase transactions in the province of Castellón – although buyers and sellers were moving more property in 2014 than the year before.

Last year, Castellón – the Valencia region's least-touristy of its three provinces – sold 5,737 homes, showing an 8.3% rise on the year before.

“For the first time since before the start of the financial crisis, sales staff at high-street banks are cold-calling estate agencies and visiting them at their offices to sell all types of mortgage offers, so that these agencies will recommend them to their customers who are seeking to buy and need finance,” reveals Francisco Nomdedéu of the College of Estate Agents in Castellón.

“They are also making more active use of advertising to reverse the reputation they have had lately of not being willing to offer mortgages and to end the resigned attitude of the home-buying public, who often did not bother to think about purchasing as they knew there was 'no point' in asking any bank for a loan,” Nomdedéu adds.

Spain's Consumers' Union, UCE, warns homebuyers to proceed with caution amid the gradually-expanding sea of mortgage offers.

Its manager, Juan Carlos Insa, says: “Read the small print of any attractive offers carefully and, if you do not understand any of it, get independent advice before you sign.”

Consumer associations such as the OMIC and OCU, of which there is normally one in most small or middle-sized towns, will advise potential mortgage customers for free.

Insa says he hopes banks will still be prudent whilst launching offers and price wars, and that 'certain conditions will continue to apply' such as 'not lending 100% of the value of the property'.

But banks are showing more willingness to offer 100% mortgages, especially as home prices are at rock-bottom meaning they are more likely to rise significantly in value in the medium to long term, and for first-time buyers it is often impossible to save up a sufficient deposit to take advantage of any other deal.

Castellón, however, continues to offer attractive prices, given that tourism and an influx of expatriates over the years seems to have largely missed the province.

Whilst Alicante and, to a lesser extent, Valencia are very multi-national with a high percentage of northern Europeans among their population both year-round and part-time, Castellón is far less so, despite enjoying all the same features as its two southern neighbours: sun-drenched beaches, 325 days a year of sunshine including four months of guaranteed beach weather, fiestas, excellent-quality restaurants which have cut their prices since the start of the recession to bring in more customers, spa resorts and golf courses, and a direct train from Castellón city to Valencia which is only a short ride from the metro station outside the terminus directly into the airport.

Now is probably an ideal time to seek out a holiday home in the Castellón province, particularly on its beautiful Costa del Azahar, since it is unlikely to ever become an overcrowded package resort destination with little beach-space, but once the economy picks up it is only a matter of time before discerning holidaymakers and expatriates begin to discover it.