Spike in first-time mortgages reported

Nearly 4,000 people rushed to draw down mortgages in the final three months of last year to take advantage of the Government’s mortgage interest relief.

Figures released by the Irish Banking Federation showed that 3,724 first-time mortgage borrowers drew down loans in the final quarter of last year. First-time mortgage borrowers accounted for more than 60% of mortgages borrowed in the final three months of the year.

IBF chief executive Pat Farrell said the figures from the final quarter showed signs of the beginning of a recovery in the housing market.

“The Q4 figures were particularly strong and IBF members worked hard to enable customers to draw down their mortgages in time to avail of mortgage interest relief before the qualification period expired.

“The continued increase in the number of new mortgages drawn down by borrowers points to a market that is moving from stabilisation into recovery, supported as it is by a certain levelling of house prices, improved borrower sentiment and the increased availability of finance from lenders,” he said.

For all of 2012 the total value of new mortgage lending was €2.6bn, with €999m in

new lending in the fourth quarter alone.

Despite the overall increase in borrowing the amount borrowed remains low. The average first time buyer’s loan now stands at just over €154,000, reflecting house prices and increased affordability.

Mr Farrell said that unless action is taken to allow an increase in repossessions by overturning the Dunne judgment the recovery will not be sustained.

“In relation to the overall mortgage market in general a number of key policy issues need to be addressed: namely, clear policy support for the prioritisation of secured over unsecured credit as the new personal insolvency regime unfolds and urgent action on the Dunne judgment,” he said.

The Irish Brokers Association Ciaran Phelan said that the bottom of the property market looks to have been reached.

“If mortgage lending hits €4bn in 2013 (four times Q4, 2012), we should be reasonably safe to conclude that confidence has returned and we are at the bottom of the property price cycle.”

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