Mortgages for first-time buyers drop by 30pc
Most lenders have increased the rates they charge new borrowers by about 1.5pc
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THE number of first-time buyers taking out mortgages has fallen by nearly a third, as lenders raise rates and make it harder for would-be buyers to get loan approvals.
Altogether, 10,435 new buyers drew down mortgages in the first half of the year, compared with 15,802 between January 1 and June 30 last year -- a drop of 5,367, or almost 30pc.
Pat Farrell, chief executive of the Irish Banking Federation which produced the figures, said many first-time buyers were getting loan approvals but were reluctant to buy while house prices were still falling.
The mortgage market is being hit collectively by negative consumer sentiment, an oversupply of properties and the uncertain economic outlook.
Most lenders have increased the rates they charge new borrowers by about 1.5pc, in a move that will add roughly €200 to monthly repayments on a €250,000 loan over 30 years.
Despite the fall, Mr Farrell said first-time buyers still represented a fifth of the mortgage market. However the total mortgage market continues to shrink with 15,725 fewer mortgages drawn down in the first half of this year compared to the first six months of 2007.
In this year's second quarter -- April to June -- just 35,154 mortgages were drawn down, a fall of 14pc.
Two areas that saw the biggest volumes of business were mortgage top-ups and people switching lenders.
Almost 11,000 people were granted mortgage top-ups in the second quarter and switched mortages were up by 12pc.
Mr Farrell said he expected the mortgage market to be worth €25bn this year, down from €34bn last year.
- Charlie Weston
