Subsidies, tax deductions, reduction in energy costs, desire for change and a huge tangle of bureaucracy and a touch of interest rate hikes. This is the perfect cocktail that has allowed Spanish banks to glimpse a powerful new business niche.
The main financial institutions in the country have designed in recent months or are finalizing specific financial products related to home renovations aimed at improving energy efficiency, while offering their clients to take care of managing all the bureaucracy involved in claiming subsidies and know the tax deductions that they can obtain from the European funds for these reforms.
The business niche appeared on October 5, 2021 when in the Official State Gazette the subsidy package designed by the Government to promote the improvement of efficiency in buildings and housing was given free rein. An aid package of 1,151 million that allows owners to access subsidies to cover between 40% and 80% of their investment in reforms, with a maximum of 18,800 euros per home. In the case of groups, the subsidy could reach up to 100% of the amount of the reform.
The market is vast. 50% of buildings for residential use (9.7 million homes) were built before 1980 without any energy efficiency criteria, and more than 84.5% of buildings currently in existence have a low or very low energy rating. low (between the letters E, F and G), compared to just 0.3% that achieves the letter A, maximum efficiency. The market is in full swing, as confirmed by a market study carried out with face-to-face visits to entities by the Inteliens Market Observatory, which identifies specific loans for home renovations. Seven of the nine financial institutions analyzed offer this type of loan. With interest rates from 4% to 8.6%.
The race has only just begun. “It has not been until April and May when the autonomous communities, which are the ones that have to channel the subsidies, have begun to approve the specifications. In some areas of greatest possible demand, such as Barcelona and its metropolitan area, they are still pending, others, such as the rest of Catalonia and Madrid, have come out very recently,” explains Carmen Urraca, director of European funds at Banc Sabadell.
Your entity has focused on neighborhood communities. They have a high share of business with property managers and rely on the attractiveness of a specific product to finance the owners’ investment in building improvement and refurbishment over a period of three to ten years. “In addition, he has a two-year grace period. It is what is expected to take to carry out this action, it has to be justified before the autonomous community and then the subsidy is received, ”says the Sabadell board. Regarding the interest rate, he only points out that “it will be very competitive”.
The same is explained from Bankinter. Loans focused on the communities of owners and with all the procedures included. The interest rate in this case is also unknown. “It will depend on the profile of each client,” they say. More aggressive is the bet of Banco Santander. Press release in between, the entity chaired by Ana Botín expands the radius of customer acquisition and in addition to the communities of owners includes individuals. Your Energy Efficiency loan finances a maximum of 100,000 euros, between 36 and 84 months at a fixed nominal rate of 4%. Like its competitors, it also offers “a turnkey project” that includes all the bureaucratic management involved in the aid. BBVA, for its part, has also designed a package to “make the most of the Next Generation recovery funds”. In this case, the types depend on the client’s profile.
CaixaBank links the financing for the energy improvement to the My Home loan, initially promoted to respond to the demand for general reform that erupted in Spain after the pandemic along with the demand for the installation of photovoltaic panels, which are also included in these financings.
Another factor that works in favor of the bank is that from 2027 it will not be possible to sell, buy or rent homes with insufficient energy certification.
