Brokers predict €4.7bn in new home loans in 2016

The country’s largest mortgage-selling group has forecast a rise of only 5% in home-loan lending next year, suggesting the modest interest-rate cuts by lenders will do little to lure first-time buyers into the market.

In new figures prepared for the Irish Examiner, the Association of Expert Mortgage Advisors projects new mortgage lending will rise to between €4.2bn to €4.5bn this year, up from €3.85bn in 2014, and will increase to only €4.7bn in 2016. The numbers suggest the new Central Bank controls that limit the amount of home-loan credit to individual borrowers are biting hard at first-time borrowers, the lifeblood of the market.

Mortgage lending hit a trough at the height of the banking crisis in 2011, when lenders advanced just €1.8bn in new loans, compared with €40bn in 2006.