Small increase in mortgage applications recorded for Q1
THE number of applications for home loans here rose slightly during the first quarter of the year, according to a new survey.
The latest euro area bank lending survey said "demand for loans from households for house purchases increased marginally" during the second quarter of this year and was unchanged in the case of consumer credit and other lending.
Irish banks are expecting a small increase in lending requests this year, the Central Bank said.
Credit standards for home loans were tightened slightly during the quarter. The Central Bank said an increase in banks' cost of funds and balance sheet constraints, diminished expectations regarding the macro-economic outlook, and less favourable prospects for the housing market all contributed to a tightening of credit standards on loans to households for house purchases.
Overall, the survey said credit standards were largely unchanged during the first quarter of 2011, although more restrictive terms and conditions were reported for loans to enterprises.
The demand for loans from enterprises was unchanged during the first quarter although the banks are expecting a mild increase in credit applications during the second quarter of the year.
Banks said access to wholesale funding markets deteriorated in the three-month period, and a further deterioration was expected in the second quarter of 2011.
The report is part of a euro-wide survey of bank lending, and included the main Irish lenders.
The wider euro-area survey found banks in the region were tightening credit standards after uncertainty over the economic outlook and their access to market financing increased.
"Euro-area banks generally tightened their credit standards in the first quarter of 2011, albeit moderately, on loans to both non-financial corporations and households," the European Central Bank said.
Euro-area banks reported a "notable increase" in companies' loan demand, which was "mainly driven" by higher financing needs for investment, the ECB said. Prospects for loan demand remain "broadly positive", it added.