New mortgage lending falls by 30%

The value of new mortgage lending in Ireland fell by 30% in the first three months of 2012 compared with the last quarter of 2011, an Irish banking federation PricewaterhouseCoopers mortgage market found.

Irish house prices have fallen by half since the credit crisis hit in 2008, and fears of further price falls and tight credit conditions have brought the property market to a standstill.

AIB head of mortgages Jim O’Keeffe said that lending at AIB had risen on the same period last year.

“At AIB, mortgage draw-downs in Q1 2012 were up 10% compared with Q1 2011.

“Overall in 2012, AIB expects to increase mortgage sanctions to at least €1bn compared with €800m in 2011.

“We are continuing to see strong growth in our new mortgage business, with AIB sanctions in March at their highest level in over 18 months.

“AIB will continue to actively support the mortgage market throughout 2012,” he said.

The value of new mortgage lending fell to €450m in the first quarter from €639m in the last three months of 2011, a fall of 30%, the Irish Banking Federation’s IBF/PwC Mortgage Market Profile showed.

Lending was 22% below the €577m lent to householders in the first quarter of last year and 63% below the €1.2bn lent in the first quarter of 2010.

The IBF/PwC data includes all of the main lenders in Ireland and covers in excess of 95% of the mortgage market, the report said.

Some parts of the Dublin housing market have shown signs of recovery in recent months, with demand being fuelled by first-time buyers and families who had delayed buying during the price plunge.

Irish house prices were unchanged in March compared with February, only the second time prices have not fallen on a month-on-month basis for over four years, according to government data.

— Reuters