Sunday 28 August 2016

Fall off in numbers of first-time buyers taking mortgages

Charlie Weston, Personal Finance Editor

Published 04/02/2016 | 10:57

'The current problem is that a growing number of potential first-time buyers maintain that revamped mortgage guidelines are making it impossible to get on the property ladder.' Photo: Reuters
'The current problem is that a growing number of potential first-time buyers maintain that revamped mortgage guidelines are making it impossible to get on the property ladder.' Photo: Reuters

THERE was a fall in the number of first-time buyers drawing down a mortgage in the final three months of last year.

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New figures from the banks show that 3,813 new buyers took out a mortgage between October and last December.

This was 220 fewer mortgages than in the same quarter in 2014.

It was the first time there has been a fall off in the number of first-time buyers in a quarter, when compared with a year earlier, since 2013, according to the Banking and Payments Federation of Ireland.

Central Bank lending restrictions, which have hit new buyers hard, have been blamed for the fall-off.

Some 8,103 mortgages were drawn down in the October to December period, valued at €1.451bn. This is an increase of 6.9pc on the previous year.

But this represents a considerable slowdown on the number of people drawing down a mortgage in the first half of last year.

The Central Bank introduced lending restrictions last February, requiring a 20pc deposit for amounts borrowed over €220,000.

Goodbody economist Juliet Tennent said: “The rules are clearly having the biggest impact on the first-time buyers category.”

Overall, last year there were 24,134 mortgages issued for house purchases.

This compares with the 47,500 transactions recorded on the Property Price Register last year, with the data for 2015 not yet complete.

Davy economist Conall Mac Coille said this meant cash buyers still account for close to 50pc of transactions.

Meanwhile, figures provided in the Dáil to Fianna Fáil Michael McGrath show that Longford has the highest level of mortgage arrears.

Some 16.83pc of mortgages are in arrears in the county, compared with 8.83pc in Cork, which has the lowest level.

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