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60pc mortgage drop

The amount of new mortgages granted to potential householders dropped by 60pc in 2009 but first-time buyers did not cut back on the level of mortgages required.

The average values of mortgages issued are back to levels last seen in early 2005. A total of 46,000 mortgages were issued throughout last year, equating over €8bn. However, the number of mortgages drawn down in 2009 declined by almost 60pc on the 2008 figure.

According to new figures from the Irish Banking Federation (IBF) and Pricewaterhouse Coopers, the volume of new lending fell by 18pc in the final quarter of the year to a total value of €1.76bn. Pat Farrell, the IBF's chief executive said that there had been some reassuring signs recently, including the increasing share of the overall market accounted for by home purchasers.

"The general economic situation, consumer confidence, the unsold housing stock and house price movements will be among the factors to influence market activity in 2010," he said.

Mr Farrell added that the value of mortgages sought by first-time buyers have not decreased.

"Rather than decreasing the size of their loan as you'd expect with house prices falling, they're probably going that extra mile to get the bigger house in the better location," he said.


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