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Number of new mortgages shows first annual increase since 2006

Research from the Irish Bankers’ Federation and PwC says a total of 3,225 mortgages were issued in the second quarter of 2012.

The value of first-time and mover-purchase mortgages in the second quarter of 2012 was 7.4 per cent higher than the same period in 2011.
The value of first-time and mover-purchase mortgages in the second quarter of 2012 was 7.4 per cent higher than the same period in 2011.
Image: Eamonn Farrell/Photocall Ireland

A TOTAL OF 3,225 mortgages were issued to first-time buyers and people moving home in the second quarter of 2012 – the first time in over six years that the figure has been higher than in the previous year.

Research from the Irish Bankers’ Federation and PricewaterhouseCoopers says that mortgages with a total value of €524 million were issued in the months from April to June.

This is up by 22.6 per cent on the first quarter, when 2,630 mortgages were worth €450 million – and marks the first time since the first quarter of 2006 that the number of mortgage drawdowns has shown a year-on-year increase.

In the second quarter of last year, the total number of first-time and mover-purchase mortgages issued was 2,502, but the mortgages were worth a total of €488 million.

This means that the 2012 Q2 figure of €524 million represents an increase of 7.4 per cent on the same period from last year.

“This continues the pattern of recent years of weak mortgage activity overall, but it is notable that the rate of contraction in such activity continues to slow year-on-year,” the report said.

First-time and mover-buyers account for around 80 per cent of the entire mortgage market.

When other smaller sectors – including buy-to-let purchasers and people re-mortgaging their homes – are included, however, the overall number of mortgages being issued is still down – by about 9 per cent – when compared to the same period of last year.

IBF chief executive Pat Farrell said the figures showed that contraction in mortgage lending was slowing “significantly”.

“Taken together with recent comments from property economists signalling stabilisation in house prices in key sectors of the Dublin market, we will be looking to the next quarter’s data for confirmation of the trend indicated in this quarter,” he said.

Farrell added that mortgage lending before the end of this year would be watched particularly closely, given that mortgages taken out after December 31 would no longer quality for mortgage interest relief.

Read: Mortgage arrears could rise to 18 per cent, says report

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Gavan Reilly

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