Mortgage lending to tighten despite increased demand for home loans

MORTGAGE lending by Irish banks is set to tighten further despite expectations that demand for home loans will increase.

Figures released by the European Central Bank (ECB) show balance sheet constraints and an increase in cost of funds for banks are among the main reasons for the sixth successive quarter of tightening of credit standards on loans.

The tightening of mortgage availability was reflected in higher loan margins and more restrictive loan-to-value ratios, according to the eurozone bank lending survey.