The Spanish housing glut should have disappeared by 2017 and work on new homes will have to start by 2015 to prevent price pressures building up, argues a new report from Tinsa, a Spanish appraisal company.

Tinsa see signs of small improvements in mortgage lending that could pave the way to a recovery in demand and predicts that housing starts will have to pick up in the second half of 2015 for supply to meet demand in 2018 without price tensions building up.

Tinsa assume the excess new housing inventory stands at around 400,000 units, based on figures from the Housing Department, and that the Spanish economy will continue to grow at its present rate, creating the jobs people need to be able to afford to buy a home.

This year will mark the bottom of the market in terms of demand, with sales of just 100,000 homes, and a similar level of sales in 2015 with roughly half of them new build properties. That implies the market can digest 100,000 new-build properties in 2016, leaving a glut of 300,000.

Small investors and the Sareb (a company responsible for managing assets transferred by the four nationalised Spanish banks) will take care of another 105,000 homes, leaving around 195,000 homes, which should be disposed of by the end of 2017.