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'An air of panic is setting in to the property market'

New figures show a spike in the number of mortgage approvals.

Image: panic via Shutterstock

NEW DATA ON mortgage approvals has raised concerns that ‘an air of panic’ is setting in to the property market.

In the three months up until the end of November, there was a 52.8% jump in the number of mortgage approvals when compared with the same period in 2013.

The figures were released today by the Banking and Payments Federation Ireland.

A total of 23,796 mortgages have been this year up until the end of November, up 42.2% compared with 2013, and with a value of €4.2 billion.

The average value was €182,413, up 2.4% year-on-year.

Fianna Fáil’s finance spokesperson Michael McGrath has said the spike is due to new rules proposed by the Central Bank.

The proposed guidelines would require most potential home buyers to come up with a 20% minimum deposit, and most loans will be for a maximum of three-and-a-half times the borrower’s income.

These have been widely criticised, with the Department of Finance reportedly branding them as “unduly restrictive”.

In a statement this evening, McGrath said:

“These figures are unlikely to have dissipated when we see the December figures”

This highlights the risk associated with the sudden introduction of restrictions in respect of the minimum deposit and loan to income ratios. A more sensible approach would have been a gradual introduction of more realistic rules.

He said the minimum deposit level should be somewhere in the region of 12%.

McGrath added that in tandem with any new mortgage rules, the Government needs to ‘ensure a stable supply of suitable new housing unit’.

Read: House prices in Ireland are rising faster than anywhere else in the world >

More: The number of homeowners who are years behind on their loans is still going up >

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Nicky Ryan

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