Saturday 24 March 2018

First-time loan average falls below €200,000

Breda Heffernan

Breda Heffernan

THE average home loan taken out by first-time buyers has fallen below €200,000 for the first time in five years.

And while buy-to-let investors and top-ups dominated the market in recent years, it is now being driven by first-time buyers and those trading up with three out of four mortgages going to people who are buying their own home.

A profile of the market compiled by the Irish Banking Federation (IBF) and PricewaterhouseCoopers revealed the volume of lending in the second quarter of this year was down by more than 38pc compared with the same period in 2009.

The market picked up by 12.5pc from the previous quarter, but this may be down to seasonal factors.

More than 7,800 new mortgages worth €1.3bn were issued during the months of April, May and June of this year. This was down from €2.1bn for the same period a year earlier.

Reflecting a fall in house prices, loan sizes also fell, with the average loan for a first-time buyer dropping to €192,000 -- the first time it has fallen below €200,000 since 2005.

Meanwhile, the average mortgage taken out by those trading up dropped to just over €234,000, compared with €246,000 a year earlier.

First-time buyers and those trading up now account for almost 75pc of new mortgage lending, up from 41pc two years ago.

IBF chief executive Pat Farrell said the figures showed there had been a significant downsizing of the market, but added that the pace of this decline appeared to be moderating.

Mr Farrell also said customers wanted more certainty and there had been a noticeable trend towards fixed rate mortgages.

Irish Independent

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