Mortgage-approval fall blamed on new rules
Published 30/05/2015 | 02:30
There has been a "stark" slowdown in the number of people being approved for mortgages, with Central Bank lending restrictions being blamed.
A total of 2,130 people were approved for a mortgage for a house purchase in April, down from the figures for the previous month, according to the Irish Banking and Payments Federation.
Separate figures from the Central Bank show that lending for house purchases declined at an annual rate of 2.6pc last month.
The Central Bank introduced rules in February which force first-time buyers borrowing more than €220,000 to have a deposit of 20pc of the property's value.
And it limited what people qualify to borrow to three-and-a-half times their income.
There were €391m worth of mortgage approvals for house purchase in April 2015, down from €424m the previous month. It's the first time the level of mortgage approvals has fallen back in the month of April since the series began in 2011. The average loan approval was for €188,900, down from €190,300 in March.
An analyst with Goodbody Stockbrokers, Eamonn Hughes, said the slowdown in lending for home buying was "stark" and was due to the Central Bank lending limits, known as macro-prudential rules.
"The surge in mortgage approvals ahead of the implementation of the new Central Bank macro-prudential rules was always likely to result in a slowdown once the rules were implemented," he said.
The number of approvals was up 11.4pc on the year, but much slower than the 41pc annual growth in first quarter of this year.
Separate Central Bank figures show that households are paying down old mortgages faster than new ones are replacing them.