NO CREDIT

TWO years after the so-called credit crunch first hit and the Balearic government is still trying to persuade the bankers to start lending. Balearic leader, Francesc Antich, will be holding crisis talks with the banks in the new year in an effort to get them lending again. The Balearic property market continues to suffer and the local government is concerned.

The banks say they are lending but no-one is borrowing. You would have thought that after two years the banks would have returned to their old lending methods...but no. But what can the government do? It can´t really introduce legislation requiring the banks to start leading again and really with more than 100'000 people without a job in the islands it is unlikely that many people will feel like going out and buying a home. The banks are obviously concerned over bad debts. I was talking to one bank manager the other day who told me that they have more repossessed properties than many estate agents. It is quite amazing. In the space of two years and banks have hundreds of homes on their books. Estate agents say that now is the time to buy but until things start to improve economically I can´t see many people going out and borrowing large sums to buy a property.