More people getting go-ahead to borrow to buy home as mortgage approval numbers soar
Close to 4,000 potential buyers got mortgage approval in August
The number of people getting the go-ahead from the banks to buy a home has continued to rise.
New figures show that close to 4,000 potential buyers got mortgage approval in August.
The number of mortgages approved was up 20pc in the year.
Economists said the rise in approval was contributing to the surge in house prices.
The total value of the approvals was €842m in the month, according to the figures from the Banking and Payments Federation Ireland.
Half were first-time buyers, while mover purchasers accounted for almost a third of approvals.
The average mortgage approval amount for first-time buyers in August was €211,000, up 11pc on the year.
The value of mortgage approvals rose by 41pc year-on-year and rose by 0.9pc month-on-month.
Re-mortgage/switching approval volumes grew 22.6pc on a year-on-year basis.
First-time buyers continue to be the fastest growing category of mortgage lending, up 41pc in the year in the most recent three months and also in the year to date.
There has been a more noticeable slowdown in the rate of growth of mover and the buy-to-let categories.
Economist at Goodbody Dermot O’Leary commented: “Given the ongoing strength of approvals and the stock for sale at all-time lows, we would be surprised if the trend didn’t continue.”
Davy Stockbrokers economist Conall MacCoille said the latest Central Statistics Office data show house price inflation now running at 12pc.
“The mortgage market data show that growing leverage on mortgage loans is contributing to double-digit house price growth,” he said in a note to investors.
However, the average first-time buyer approval amount of €211,000 was well below the limits set by the Central Bank, he said.
Banks are not allowed to loan borrowers more than three-and-a-half times their income for a mortgage.
Close to 30,000 borrowers have been approved by their banks in the eight months to August, a 32pc increase on the 22,226 approvals seen in the same period last year.