Spanish flags hang from the windows of a residential buiding in Madrid, on September 26, 2017. Patriotic protests have multiplied in Spain five days before the banned referendum on the independence of Catalonia. Polls show Catalans are split on the issue of independence, but a large majority want to vote in a legitimate referendum to settle the matter. / AFP PHOTO / PIERRE-PHILIPPE MARCOU (Photo credit should read PIERRE-PHILIPPE MARCOU/AFP via Getty Images)

The average age of first-time homeowners in Europe is on the rise. The mean age of first-time buyers in the UK reached 34, up six years from 2007 and matching Europe’s average. Spain’s, however, is significantly higher at 41, up from 31 in 2014.

Spanish housing
Spanish flags hang from the windows of a residential building in Madrid, where new housing schemes have been announced to help fist-time buyers (Photo by Pierre-Philippe Marcou/AFP via Getty Images)

The main hurdle for those trying to get on the housing ladder in Spain can be seen across Europe; salaries are not increasing in line with property prices.

Despite reports last year that house prices may drop, 2023 has seen the biggest house price increase in Spain in 17 years – up by 8% and now costing €360,6000 (£309,000).

What is being done to combat rising house prices in Spain?

The Spanish government is trying to help bring the era of rising house prices to an end. In a pre-election pledge, Prime Minister Pedro Sanchez announced the ICO mortgage guarantee scheme in May. The scheme will provide a 20% deposit to eligible young people, effectively offering them the opportunity for a 100% mortgage, without saving for a deposit.

To be eligible, applicants must be under 35 and purchasing their home for the first time. However, if a home is being purchased with dependent minors in mind, there is no age limit. 

However, there is a cap on annual income, with those earning over €37,800 deemed ineligible.

The scheme isn’t limited to Spanish citizens either, but one does need to have a valid DNI (Documento Nacional Indentidad) or NIE (Número de Identificación de Extranjero) – a national identity card or number.

This move by the government has sparked further help schemes throughout the country.

This week, the city of Madrid announced the ‘My First Home’ package, dedicating €18m to help first-time buyers – 50% more than initially planned.

Similarly to the ICO mortgage scheme, individuals must be under 35 to be eligible. To qualify for My First Home the property must be in the community of Madrid and one has to prove they have lived continuously there for two years prior to applying.

Although there isn’t a ceiling on income, the property must not exceed €390,000 in value.

Could this reduce the age of first-time buyers?

Although the Spanish government has introduced housing reforms in recent years, the ICO mortgage scheme is the first to focus on buyers. The State Housing Plan in 2018 aimed to strengthen the rental market by introducing up to 40% rent subsidies (or 50% for under 35s).

The scale of the ICO scheme is also significant, as it is available to over 16 million eligible applicants. To put this into perspective, the UK government’s Help To Buy scheme assisted 350,000 applicants onto the property ladder. Schemes like ICO can also encourage foreign buyers to stay in the country long term. The number of UK nationals living in Spain grew from 381,000 in 2020 to 408,000 in 2021 – up 7%.

[Read more: Why I decided to leave Madrid]