Thursday 24 May 2018

Loans continue to fall despite rising demand for mortgages

Colm Kelpie

Colm Kelpie

LOANS to Irish households continued to decline last month, figures from the Central Bank show.

Lending fell 4.5pc in May following a 4.3pc fall in April.

Lending for house purchases dropped 2.1pc over the year, while lending for consumption and other purchases was 11.5pc lower for the same period.

Irish private-sector deposits rose at an annual rate of 7.6pc in May, following a 7.7pc increase in the year to the end of April.

The Professional Insurance Brokers Association (PIBA) said the figures show that the Government needs to face up to the banking crisis.

"The declining level of lending at a time when there is a strong and growing demand for mortgages is indicative of a seriously malfunctioning banking system," Rachel Doyle, PIBA chief operations officer, said.

PIBA said that it recorded a surge in demand for mortgages during the first three months of this year, with a 13pc rise over the final quarter of 2012.

"There is a very large unmet need with the biggest impediment to people taking out mortgages being the unwillingness of banks to lend, with only the slightest easing in what is a grossly malfunctioning system," Ms Doyle said.

Irish Independent

Business Newsletter

Read the leading stories from the world of Business.

Also in Business