Spain’s government is offering to underwrite a chunk of the mortgages taken out by young Spaniards as part of a pre-election push to make owning a home more affordable.
(Bloomberg) — Spain’s government is offering to underwrite a chunk of the mortgages taken out by young Spaniards as part of a pre-election push to make owning a home more affordable.
The Cabinet is set to approve on Tuesday a proposal announced Sunday by Prime Minister Pedro Sanchez for the state-development bank ICO to guarantee as much as 20% of loans for home purchases. The program will benefit people aged 35 and under with annual salaries of as much as €37,800 ($41,665).
The mortgage-underwriting plan is the latest example of the government’s new-found focus on housing affordability ahead of regional and municipal elections on May 28. Previously, Sanchez had said the government would donate properties, build new homes and also allocate land for social housing.
Part of the properties will come from portfolio owned by the Spanish bad bank. The aim is to make at least 90,000 houses available over several years.
The mortgage plan came under fire from the government’s junior coalition partner, Unidas Podemos, which said that it would only help a small group of people, while rising prices put house purchases beyond the reach of many Spaniards.
Campaigning for the elections doesn’t officially start until May 12.
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