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14% of Spaniards paid with a mortgage delay and bills before raising rates

Date: March 29, 2024 Time: 00:30:20

14% of Spaniards have difficulties to face the mortgage, the rent or the invoices and are late in the payments related to their home in 2021, before the inflation had gone unbridled in Spain and in Europe and the European Central Bank (ECB) began to raise interest rates to deal with it. Eurostat, and that help to narrow down that group of vulnerable families that is only partly reflected in the statistics.

Spain is among the five countries where the proportion of people living in households that are behind in their payments has increased in the period between 2010 and 2021, especially since the coronavirus pandemic broke out three years ago. It is the opposite of what has happened in the rest of the countries of the European Union, where the trend has been towards a gradual reduction. However, at the end of this period Greece (36.4% of its population with difficulties in paying their bills), Bulgaria (20.4%), Cyprus (17.3%) or Croatia (16.6%) found themselves in a worse situation.

The Bank of Spain understands by vulnerable families those who must dedicate 40% of their income to pay their debts. The European statistics office goes further by analyzing the so-called housing cost overcharge rate, the percentage of the population living in households in which total house-related payments represent more than 40% of their disposable income. This rate affects 11.4% of those who live in Spanish cities and 5.3% of those who live in rural areas.

In the first case, the percentage is also above the community average, since 10.4% of Europeans who live in a city are also affected by this excess of costs in relation to their disposable income. However, the key is that the latest data available to Eurostat refer to the year 2021 and do not yet contemplate the worst part of the inflationary and energy crises that have been aggravated by the Russian invasion of Ukraine.

In the summer of that year the energy crisis started and pockets began to notice the rise in prices of electricity or gas. Inflation stood at 6.5% on average for the year as a whole, two points below what it closed last year, when it peaked at 10.8% in July, the same month in which the ECB began the increases in rates and when the twelve-month Euribor, the main reference for households with a variable rate mortgage, began its vertical climb towards 3,337%, which it dismissed on average last month.

Increase in energy poverty in Spain

Tension for the mortgage and with the electricity and gas bills. Energy poverty in Spain has been felt in recent years, and perhaps it is still increasing, as Guillermo García Álvarez points out in a report published by Funcas. In 2021, 14% of homes will not be able to maintain an adequate temperature, a percentage that doubles the EU average (which stands at 7%). The measures adopted over the last two years can alleviate, in his opinion, the increases in the cost of electricity for consumers, but they are not viable solutions in the long term, since its cost is exorbitant.

“Current measures only focus on the short term and do not combat the inflationary process. It is clear that compensation measures for households or vulnerable sectors, but they require an effective design to take effect,” he says. During this time, measures such as tax cuts on energy or the so-called ‘Iberian cap’ on gas have been linked together, but also the discount on fuel, the Codes of Good Practices to alleviate the mortgage burden (which aria the Goanbierno effect to more than a million households), the reduction of VAT on food, the increase in the Minimum Interprofessional Wage (SMI) or the approval of the check of 200 euros with low levels of income and wealth, among others.

In the midst of the slowdown in the economy and the increase in financing costs for families and companies, there is concern about what may happen in the coming months, especially in the face of next winter if the war continues. Save the Children. At the moment, only 16% According to their calculations, in Spain, 4.5 million people pay their bills late due to the economic difficulties they are going through, while more than 6.7 million cannot maintain their home at a suitable temperature.

* This website provides news content gathered from various internet sources. It is crucial to understand that we are not responsible for the accuracy, completeness, or reliability of the information presented Read More

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.
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