Almost 16,000 have taken out mortgages this year as lending rises

Almost 16,000 people have taken out a mortgage to date this year as an increasing number of people look to get on the property ladder.

On average, 2,574 mortgages were approved in each of the summer months of June, July and August — 92% of which were for house purchases.

This degree of lending represents a significant increase on last year’s transactions, according to the latest figures released by the Banking & Payments Federation Ireland.

The federation Mortgage Approvals Report for the three months to the end of August shows a 45% increase in mortgage lending activity compared to the same period in 2013 while, on a monthly basis, growth of 0.7% was recorded.

Analysts at Goodbody Stockbrokers said that the growth trends in the latest report mirror those of earlier reports and point towards “strong momentum” being garnered in the latter part of the year.

Growth of 56% and 54% was recorded respectively in the opening two quarters of the year.

“While the data can be quite volatile, the growth rate in mortgage approvals by value has been consistently above the 50% mark in the year to date,” said a Goodboys spokesperson.

“For 2014, we are forecasting total mortgage lending of €3.8bn [up 50% year-on-year] with the latest figures suggesting that the market is well on track to achieve this with strong momentum into Q3.

To date, €2.8bn worth of mortgages have been approved this year.

A report from Davy Stockbrokers yesterday warned that inevitable interest rate increases could leave mortgage-holders vulnerable to considerable mortgage payment hikes in the coming years.

With the average mortgage interest rate at 4.5% — close to its lowest level in 40 years — analysts at Davy Stockbrokers warned that interest rate increases of 2 percentage points could add up to additional payments of almost €520 per month for borrowers in areas such as south county Dublin, where prices have reached an average of €441,000 for a three-bed semi-detached house.


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