Buying a house in the middle of coronavirus lockdown "de-escalation" in Spain

The coronavirus crisis has seemingly not stopped the demand for home ownership in Spain. According to data from the Centre for Sociological Research (CIS) for the month of April, 9% of Spaniards are thinking of moving home, in line with the figure recorded at the beginning of the year.

Many families have realised during the COVID-19 quarantine that their current home does not meet their needs, especially in the case of young people and residents in large urban areas. In this scenario, and given the real estate opportunities and bargains that could appear in the coming months by the expected fall in prices and the need for sale by many owners, the real estate provider Solvia has summarised in a study some practical tips for buying a home in the middle of de-escalation and with an eye on security measures to prevent infection of coronavirus.

Among the recommendations are how to calculate your available budget, the keys to choosing a property or the factors to pay attention to when visiting a home. Remember that real estate agencies can already schedule visits with potential buyers or tenants, even in regions that are in phase 0, as long as the property is uninhabited and safety regulations are followed.

Let's have a look at Solvia's advice for those who are thinking of looking for a new home:

Savings and financing are keys to your budget

The first thing everyone must be clear about before buying a property is what your budget is. And how is it calculated? This should be done taking into account the savings and the approximate financing that could be available.

Normally the banks are willing to grant mortgages of an amount close to 80% of the purchase price of the property or of the appraisal value, therefore you will need savings close to 20% to give the deposit of the property and to have another 10%-13% to cover the expenses of the operation. However, some entities are willing to lend a higher amount, as long as the client meets a series of conditions, such as having a stable job.

Solvia assures that, as far as the mortgage is concerned, the potential buyer "will not know for sure how much financing is available and under what conditions until a property has been identified, although it is possible to have a reference framework on which to operate". A quick calculation proposed by the company is to multiply by four the annual gross family income to have an approximate figure.

Finding a good mortgage

A good way to find out how the market is doing is to consult the websites of the main entities or to use online loan comparison sites, such as idealista/hipotecas, for the purchase of a home. The positive side, according to Solvia, is that it is not necessary to go to a bank branch to deliver the documentation, but you can send an application online to find out if you could be granted the mortgage. In addition, the financial sector is currently offering very advantageous conditions and unchanged risk critera thanks to the fact that interest rates find themselves at historical lows and the banks need to grant loans to maintain their business margin.

For example, in the idealista/hipotecas mortgage comparison site, offers at a variable rate of 0.8%+ Euribor can be found, while there are fixed loans at 1.5% interest, with conditions to be met. The difference will be found in the bonuses for lowering interest (for example, direct deposit of your salary, taking out home insurance amongst other things...) and in the fees established by each bank (for taking out the loan, for early repayment, whether it is partial or full...)

Analyse your personal financial situation

Solvia's study recommends asking yourself this question: "Can I afford to buy? According to the company, the key is to take into account your particular job stability in the short and medium term.

"Analysing external factors related to the market is important, but the key to knowing if it is a good time to buy is to examine the particular economic context. We are at a time of uncertainty where temporary layoffs (ERTE) or reductions in working hours (and pay) are the order of the day. Therefore, potential buyers must be proactive and assess the stability of their personal employment situation for the coming months," the provider states.

Determining your ideal home

The study assures that it is necessary to value the new housing needs that the confinement has brought and insists that if this situation has demonstrated anything, "it is the fact that there are many needs that before were in the background; things that came behind characteristics such as the m2, the height, location in central areas or to have a communal swimming pool which were the most important features. Now, the need for open spaces, outdoor areas such as terraces or balconies, natural light, energy efficiency and toxic-free building materials are all on the rise. In addition, during this part of the process, and thanks to the opportunities that teleworking brings, it is also worth extending the search to areas on the outskirts, where it is possible to find all these features at a more affordable price".

Finding the right housing

Once the family's needs and approximate budget have been examined, it is time to search the market and use online alternatives before arranging a visit.

"To avoid unnecessary travel and exposure to the virus as little as possible, it is advisable to take advantage of the online tools that have created a trend during the weeks of confinement (3D plans of homes, virtual tours, videos and photos in good quality...) and make sure that those properties that fit the price range marked also meet the housing and quality standards established from the beginning," says Solvia.

In addition, the provider recommends evaluating the neighbourhood where the selected properties are located beforehand and taking good note of aspects such as: availability of health centres, schools, shops, supermarkets, restaurants, parks, public transport and traffic to name a few. For this purpose, you can choose to consult a range of online tools available that analyse all these extra services (the approximate cost can be around 20 euros for a complete report).

Tips for property visits

After locating several homes that fit our needs and budget, it is time to arrange visits. In general terms, "if the property is of great interest, it would be convenient to obtain the "nota simple" of the property, a certificate by the community that accredits that the seller is up to date with the payment, the state of the property's charges, the most recent water, electricity and gas bills, or the certificate of energy efficiency. All of these can be obtained online", stresses Solvia.

In addition, and to avoid risks of contagion, the study insists on the need to "respect hygiene measures and make the most of each visit to avoid future trips, although it is usually necessary to visit many properties before deciding on the final one". For this reason, the advice from Solvia concludes that, "it will be fundamental to be careful with the imposed security measures and to take full advantage of each visit, paying close attention to certain aspects: orientation, insulation, possible humidity, state of conservation, installations, energy consumption or age".