Mortgages: THE IRISH Bankers' Federation has claimed the mortgage market "may be stabilising", despite the fact the number of new home loans issued last year fell 50 per cent compared with the previous year and is now down more than 90 per cent when compared with the peak lending period six years ago.

The market profile published by the federation and PricewaterhouseCoopers yesterday revealed just 3,856 new mortgages, worth €639 million, were issued in the final three months of 2011.

All told, 14,273 new mortgages worth €2.5 billion were issued by financial institutions doing business in the State last year. The figure for 2010 was 28,000 loans, worth more than €4.75 billion. The lending market has now fallen by more than 95 per cent since the last quarter of 2005.

The federation based its upbeat assessment on the fact that although the level of new lending in the last quarter of last year was down 31 per cent by volume on the same period in 2010, it was up almost 7 per cent on the preceding quarter and has now recorded three consecutive quarters of growth for the first time since 2005.

First-time buyers and mover-purchasers continue to dominate what is a smaller market in terms of overall activity and together account for four-fifths of all new mortgages issued. In effect, more than 85 per cent of all mortgage credit now goes to home-purchasers.

The average first-time buyer’s loan now stands at just over €159,000. “Three successive quarters of growth provide the first tentative signs that the market may be stabilising,” federation chief executive Pat Farrell said.