Spanish swaps scrapped

Spanish banks have announced that they intend to reduce debt-for-property swaps with developers, due to a glut of homes on their books, according to a report in the Spanish daily El Pais...

The news will come as a further blow to developers, who already have to slash their prices in order to compete with banks selling repossessions with preferential mortgage terms, says Mark Stucklin of Spanish Property Insight.

Banks now feel that they have taken on too much - property and non-property related - bad debt, and simply can't cope with any more homes on their books, especially with existing demand for property in Spain at an all-time low.

Developers will now be lumbered with the units they cannot shift, which is concerning, given that there it is an estimated one million unsold new-build homes on the Spanish market.

Source: www.homesoverseas.co.uk/news