Saturday 21 April 2018

New mortgage lending exceeds repayments

'Figures from the Central Bank of Ireland (CBI) show home loans increased for two consecutive quarters in the second half of 2017, a trend not seen since 2009' Stock photo: PA
'Figures from the Central Bank of Ireland (CBI) show home loans increased for two consecutive quarters in the second half of 2017, a trend not seen since 2009' Stock photo: PA

Gretchen Friemann

Net mortgage lending increased in the second half of 2017 - the first half-yearly increase since the crash, as new lending outpaced repayments and restructurings.

Figures from the Central Bank of Ireland (CBI) show home loans increased for two consecutive quarters in the second half of 2017, a trend not seen since 2009.

In the final quarter lending for house purchases increased in net terms by €139m, following a rise of €169m in the preceding three months. The data also highlights the preference among borrowers for fixed rate mortgages. Fixed rate borrowing increasing in net terms by €1bn, following a rise of €1.1bn in Q3.

By contrast, the appetite for variable rates declined again, reflecting assumptions the European Central Bank will raise rates within the next two years.

According to the CBI's quarterly report, 'Trends in personal credit & deposits', variable or "floating-rate lending continued to decline, decreasing by €902m over the quarter".

Demand for buy-to-let loans also remains suppressed according to the figures. While the volume of owner-occupier mortgages increased for the seventh consecutive quarter, rising by €585m in Q4 2017, the appetite for loans tied to residential investment properties continued an established downward trend, falling by €424m over the quarter.

Meanwhile, the heads of Permanent TSB and AIB are due before the Oireachtas Finance Committee today - with the latter expected to re-iterate its stance of excluding owner-occupier mortgages from any future loan portfolio sales.

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