Monday 26 June 2017

Sharp rise in mortgage lending as market eases back to health

The number of people approved for a mortgage rose sharply in October, as the home loan
market continues to improve. Stock picture
The number of people approved for a mortgage rose sharply in October, as the home loan market continues to improve. Stock picture
Charlie Weston

Charlie Weston

The number of people approved for a mortgage rose sharply in October, as the home-loan market continues to improve.

And there are expectations that lending will pick up even further owing to the Government's help-to-buy scheme and changes to Central Bank rules. An average of 3,100 people have been approved for a mortgage each month since the summer.

Half of these were first-time buyers, according to new figures from the Irish Banking and Payments Federation.

The figures show the value of mortgage approvals in October rose by 29pc compared with the same month a year ago. But this was a slowdown on the even stronger approval rises in August and September.

First-time buyers account for the biggest share of approvals. Close to 47pc of those approved for a mortgage were first-time buyers.

However, approvals for movers are now growing at a faster pace than those for new buyers.

Those moving house accounted for a third of people being approved for a home loan. Some 1,080 people were approved for a mortgage to move home in October, a rise of 31pc on the same month last year.

David McNamara, an economist with Davy Stockbrokers, said the figures showed mortgage approvals softening in October. "New loans worth €621m were approved in the month compared with €663m in September and a peak of €692m in July. This might be in part due to seasonality as the housing market winds down toward the year-end," he added.

Alan McQuaid, of Merrion Stockbrokers, said that with the Central Bank easing its lending restrictions for first-time buyers, mortgage approvals should pick up in the coming months.

"That will likely keep upward pressure on house prices in the short term until the supply issue is sorted out," he said.

Goodbody's Dermot O'Leary said the Government's buyer-support scheme and the easing of lending rules would boost demand. "Both of these policy developments will support mortgage demand," he added.

Irish Independent

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