Borrowers in Spain are finding even harder to obtain a mortgage than last year and there were just 18,420 new mortgage approvals in May, down 29% in a year, according to the latest data from the Instituto Nacional de Estadistica (INE).

The average value of a new mortgage loan also fell, down 5.4% to €96,000, while the average interest rate on a Spanish new mortgage was 4.58%, the highest level in a year.

Spanish banks are still tightening their lending, offering smaller loans but at higher spreads compared to Euribor, making mortgage borrowing more expensive for the few that can get it.

Spanish banks are reportedly only really keen to lend if the buyer is willing to take a repossessed home off of their books.

Euribor (12 month) rose slightly last month, from 0.507% in June to 0.525% in July, up 3.6% in a month, but down 50.5% over the past 12 months. The Euribor lending rate is still abnormally low thanks to the intervention of the ECB.