The number of residential mortgage accounts in arrears continued to drop in the final three months of last year, the sixth successive quarterly decline, according to new figures from the Central Bank.

The data shows however that mortgage accounts in arrears for two years or more are still rising.

Some 110,366 residential mortgage accounts - equivalent to 14.5 per cent of all residential mortgages - were in arrears at the end of 2014. This marks a 6.4 per cent decline compared to the third quarter.

The figures show that accounts in early arrears declined significantly during the fourth quarter, falling 3.8 per cent to 31,667 at the end of December, or 4.2 per cent of the total stock.

Accounts in arrears over 90 days - equivalent to 10.4 per cent of all residential mortgage accounts - fell by 7.4 percent from October to December to 78,699. However, accounts in arrears for over 720 days continued to rise during the fourth quarter, albeit at the slowest rate to date.

According to the latest figures, the number of accounts in arrears for more than 720 days increased by 294 or 0.8 per cent in the final quarter of 2014. Such accounts now represent close to half of of the 78,699 customers in distress for more than 90 days.

The outstanding balance on mortgage accounts in arrears for 720 days or more was €8.2 billion, the figures show.

Fianna Fáil finance spokesperson Michael McGrath described the increase in the number of accounts in long-term arrears as a “damning indictment of the Government’s strategy in relation to distressed mortgages. “

“The falls in early stage arrears should not be considered as cause for self-congratulation as these are typically the easiest cases to deal with. The reality is that there are still a huge number of arrears cases to be dealt with. In fact of the total stock of 78,699 residential accounts that were in arrears of more than 90 days, just 28.1 per cent were classified as restructured at the end of December, compared to 29.3 per cent at the end of September,” he said.

Philip O’Sullivan, an economist with Investec said the decline in the number of accounts in arrears was a welcome trend and one that reflected the improving economic backdrop and more effective engagement by both lenders and borrowers. He said however that the rise in long-term arreas was a serious problem that required ongoing attention from banks.

Some 114,674 residential mortgage accounts were classified as restructured at the end of 2014, reflecting a quarter-on-quarter increase of 4.3 per cent. Of these accounts, 84.9 per cent were deemed to be meeting the terms of their current restructure arrangement. The largest increases in restructures were again recorded in the categories of split mortgages and arrears capitalisations, the Central Bank said.

Buy-to-let mortgage accounts in arrears over 90 days decreased by 7.6 per cent during the fourth quarter; the largest decrease recorded in this category to date. At the end of December, there were 15,386 Buy-to-let accounts in arrears over 720 days, with an outstanding balance of €4.8 billion.

Goodbody economist Dermot O’Leary said while the latest statistics show progress on reducing arrears, doubts remain about the suitability of some of the options employed in restructuring accounts.

He noted the high rate of re-default by owner occupiers and investors on accounts that have undergone arrears capitalisation restructuring, which represent 35 per cent of the total restructures undertaken.

Mr O’Leary also questioned whether the 33 per cent rise in mortgage restructures in the past year represented permanent solutions.