Snow and rising prices are blamed as mortgage approvals fall by 8pc
There has been a fall in the number of people getting the go-ahead from a bank to take out a mortgage as house prices continue to rise.
New figures from the banks show that just over 3,300 applicants got mortgage approval in March, down by almost 300 on the same month a year ago.
This was a fall of 8pc, according to Banking and Payments Federation Ireland (BPFI).
The high cost of housing, Central Bank mortgage rules and bad weather have been blamed for the fall in numbers.
The average first-time buyer is now also being forced to borrow €22,500 more than last year, which reflects house prices rising at their fastest rate in nearly three years.
Some of the worst snowfalls in decades and a very strong first quarter last year are also thought to be behind the fall in the March figures. The figures may also have been affected by Easter being early this year.
The total number of people getting approval from their bank to borrow fell to 3,374 in March, according to figures published yesterday by the BPFI.
The figures also show that half the mortgage approvals in March were for first-time buyers, while mover purchasers accounted for 27pc.
Approvals for first-time buyers saw the biggest fall, down almost 200 in March compared with the same month last year.
But there was a strong rise in the numbers who are getting approval for a mortgage to move, or switching their mortgage to a bank offering better value.
A mortgage approval is defined as an offer of credit to a buyer, but the loan may not be drawn down if properties at the right price are not available to purchase.
What is classified as approval for a re-mortgage/switching was up by almost 40 to 423 people.
This reflects increased competition among banks on interest rates, and the rising levels of equity in homes, according to economist with Goodbody Stockbrokers Dermot O'Leary.
He pointed out that changes to the Central Bank lending rules meant fewer exemptions from the rules for first-time buyers.
Previously, 25pc of first-time buyers could get an exemption from the rules restricting what they can borrow to three-and-a-half times their salary, that is now restricted to 20pc.
"Lack of available stock remains the major issue holding back faster growth in mover-purchaser mortgages," he added.
The average loan size for a first-time buyer was €216,500, up €22,500 on the same period last year.
Movers borrowed an average of €13,000 more, at €253,000.
Overall, the value of mortgages drawn down in the first three months of the year grew by 22pc to €1.7bn.
This was close to matching the same level of growth in the last quarter of 2017.
The number of mortgages drawn down was up by 13.5pc to 7,879.
Davy Stockbrokers' David McNamara said he expects the mortgage market to grow to €9.2bn this year.