Early-stage mortgage arrears have fallen below 2% for the first time in three-and-a-half years, according to ratings agency Fitch.

As the Government seeks to turbo-charge the recovery in the Irish property market, ratings agency Fitch is predicting that the arrears crisis will continue to grow as the buy-to-let sector fuels defaults and depresses prices outside of Dublin.

The level of mortgage arrears of over 90 days will peak in 2014, having reached a new high of 18% in the final quarter of last year, according to Fitch Ratings.