Business Irish

Sunday 4 December 2016

Number of mortgages issued just 7pc of rate during boom

home loans

Charlie Weston, Personal Finance Editor

Published 17/11/2011 | 05:00

THE collapse in mortgage lending has gathered pace with just 3,600 mortgages issued during the summer.

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This is the lowest lending level since banks first started pooling information on the number of home loans they issue.

Mortgage activity is so weak that the numbers taking out a home loan between July and September is now just 7pc of the numbers issued during the height of the boom in 2006.

And the number of mortgages given out in the third quarter was half of the figure for the same three months last year, data from the Irish Banking Federation and PriceWaterhouseCoopers shows.

Almost half of all mortgages are now being taken out by first-time buyers. This is the highest proportion of the market new buyers have ever had.

Another third of home loans are being taken out by people moving house.

New buyers and movers combined now represent some seven out of 10 mortgages being taken out.

In the first nine months of this year, 10,417 mortgages were issued, down from 22,042 in the same nine-month period last year. Director of MoneyCoach.ie Frank Conway said the latest figures showed that the mortgage market had collapsed.

"This year is now on track to be the worst year for mortgages since 1971, a year when there were 11,728 mortgages originated," he said.

He expects just 10,500 mortgages to be issued to first-time buyers and home movers this year. AIB, Bank of Ireland and KBC Bank were the main banks lending at the moment, with some lending by Ulster Bank, he added.

However, earlier this week KBC said it was tightening its rules on lending for first-time buyers, with a 20pc deposit now required.

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