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Fall in number of people getting mortgage approval ahead of expected rate rises

New figures show that 4,300 home loans were approved in April


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File photo.

File photo.


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There has been a drop in the number of people being approved for a mortgage, in a further sign that the red-hot property market may be calming down.

It comes ahead of a series of expected mortgage rate rises, the first of which could be just weeks away.

New figures from the banks show that 4,300 mortgages were approved in April.

This is down by almost 6pc on the previous month and down by 1.3pc on the same month last year.

Half of those approved for a mortgage are first-time buyers.

The slowing in the numbers approved for a home loan comes as two lenders have already said they are increasing their mortgage rates.

ICS Mortgages has again increased its lending rates, with a rise of 1pc for three and five-year fixed rates.

Avant Money, the cheapest lender in the market, has announced it is increasing some of its fixed rates.

There are indications that surging property prices are easing off.

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Prices nationwide jumped up by 15.2pc in the year to March, according to the Central Statistics Office, but the monthly rise at 0.6pc was the slowest rate of rise seen in 12 months.

The Banking and Payments Federation said that the value of mortgages approved in April was €1.16bn.

This was down almost 4pc on the value of mortgages approved in March, but up 7pc on the same month last year.

There has been a 43pc surge in the number of people re-mortgaging or switching compared with April last year.

Around 775 homeowners are either re-mortgage or switching to another lender.

The imminent departures of KBC and Ulster banks, and the expected rise in lending rates, are likely to be behind this rise, experts said.

Chief executive of the Banking and Payments Federation Brian Hayes said the latest mortgage figures show a slowdown in approvals growth.

But he said it was important that we look at this in the context of the historically high levels at which the market has been operating for some time now.

KBC Bank economist Austin Hughes said the pull-back in April approvals reflects a softening in the housing market. 

He said demand for mortgages was being curbed by affordability strains.

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