The Bank of Spain yesterday warned lenders against lowering credit standards as the country’s property boom faltered. Financial Times

Miguel Angel Fernández Ordóñez, the central bank’s governor, indicated that he was more worried about the dramatic rise of financing costs at Spanish companies, which have borrowed heavily to speculative development and acquisitions.

Spanish construction groups have been particularly heavy borrowers as they diversify into other activities ahead of an expected building slowdown in Spain.

The net debt of Spain’s six largest construction and infrastructure groups tripled in the 12 months to March, to €83.5bn ($111bn, £56.4bn).

Fernández Ordóñez was more reassuring on housing. 'There are still important factors that will support demand for housing over the medium and long term,' he said. The arrival of 5 million immigrants, boosting the population by 10% since 2000, is the strongest factor underpinning demand for new homes.