Rise in new car loans may be increasing faster than new mortgage lending

The increase in car loans may be rising faster than the rise in home loans, new figures suggest.

The Central Bank figures show that new car loans in the year to the end of April rose by a gross €2.1bn — the largest rise in the seven years of the data series.

The increase compares with the rise of €1.2bn in net mortgage loans advanced by banks over the same period.

The Central Bank stresses that the car and mortgage data are not directly comparable because the increase in car loans is on a gross basis and the mortgage figures include repayments.

Its Money and Banking Statistics bulletin shows personal contract plans, or PCPs, helped boost car lending, although regular hire-purchase loans “were the main driver of the increase in lending”, the bank said.

Amid political concerns, the regulator last year published research into the role of PCPs in financing car loans in Ireland.

After a slow start, the increase in new homes supply may be showing through in the new mortgage lending figures.

The Central Bank said the €1.2bn net increase in new mortgage lending in the year to the end of April comes after “an increase of just €211m” a year earlier.

Mortgage brokers widely estimated that the value of new mortgage lending this year will top €10bn for the first time since the crash.

The latest figures also show that loans for households for consumption increased by €612m from the previous year.

But the figures suggest that households remain cautious, said economist Alan McQuaid.

“And with the Brexit uncertainty hanging over the economy, this is unlikely to change anytime soon,” he said.