THE end of the mortgage drought has been signalled by a strong rise in the number of people approved for a home loan, an expert has said.
New figures show that 1,446 buyers got the green light from their bank for a mortgage in December, a rise of 30pc on the same month in 2011.
The value of these approvals amounted to €234m, according to the Irish Banking Federation.
It said the new figures showed continued growth in the number of mortgages approved by mainstream lenders.
But the numbers approved in December were lower than those for November, which bankers said was due to the fact that December was a shorter business month, and there was a rush in November to qualify for mortgage tax relief.
Most of those getting mortgage approval in December would have failed to qualify for the tax relief, as a mortgage had to be, not only approved, but drawn down before the end of 2012 to qualify for the relief.
So most of those getting approval in December were going ahead despite not getting tax relief.
Mortgage expert Frank Conway, of the Irish Financial Review, said this showed that the worst was over for mortgage lending.
"The Irish mortgage market dropped by 90pc between 2006 and 2012. It now appears this period of extreme mortgage drought has come to an end," said Mr Conway.
Bank of Ireland and AIB have recently announced plans to significantly increase residential mortgage lending in 2013 as has Permanent TSB, the one-time largest residential mortgage lender in Ireland.
Mortgage lending hit a 40-year low in 2011. The final mortgage statistics for 2012 are expected in the coming weeks and are expected to show the first annual increase since 2006, when more than 111,000 mortgages were drawn down.
Mr Conway added: "While the ending of mortgage interest relief in December will be a contributory factor to the increase in activity, falling average mortgage amounts coupled with a rise in appetite for lending at the main banks appear to be the primary drivers."
The new data tracks approvals from nine major lenders – Bank of Ireland, Allied Irish Banks, EBS, KBC, Permanent TSB, Ulster Bank, Danske Bank, Haven Mortgages and ICS Building Society.