The number of people being approved for mortgages has jumped sharply over the last 12 months according to new figures released by the umbrella group representing the Republic’s banking sector.
According to the Banking and Payments Federation Ireland (BPFI), an average of 2,352 mortgages were approved in the three months to the end of April 2015 with 2,130 or 91 per cent of the approvals being granted for house purchases up 31.8 per cent year-on-year and 4.4 per cent month-on-month.
The average monthly value of mortgages approved per month over the same period was €441 million, with €412 million being for reserved for home purchases. The value of mortgage approvals increased by 43.6 per cent year-on-year and by 2.6 per cent in a single month.
Data collection for the BPFI Mortgage Approvals Report began in September 2012, covering the period from January 2011 onwards in respect of the market’s main mortgage lenders. Its figures are based on a three-month moving average.
Year-on-year compares the average for the three months ending April 2015 with the three months ending April 2014. Month-on-month compares the average for the three months ending April 2015 with the three months ending March 2015. The numbers show the sharpest jumps were recorded in the earlier part of the three-month period with the numbers declining in April.
"Broadly speaking we wouldn't have any significant concern over what looks, on the face of it to be a major drop-off in approvals in April," said the director of the Association of Expert Mortgage Advisers Ken Murray. "In reality, this is just the natural ebb and flow of the mortgage market on the back of what was a major rush at the beginning of this year and the end of last year of mortgage applicants looking to get in before the new Central Bank rules took effect."
Under those rules banks are allowed to offer greater LTV loans to a certain percentage of its book, with Mr Murray saying the association would be monitoring lending exemptions and allowances in the months ahead to see” what will happen if an applicant is approved for lower lender limits but when they go to draw down the mortgage at the end of the year they find that the lender has actually reached their cap in terms of how many exemptions it was allowed.”
He suggested that lenders may cut their approvals over the next few months for such cases and may review them later in the year.
Meanwhile Bank of Ireland announced cuts of up to 0.3 percentage points to its in fixed mortgage interest rates but made no cuts to its standard variable rates which remain significantly higher than the euro zone average and almost four times' tracker rates
The biggest cut was to its 10-year fixed-rate mortgage, with smaller cuts applying to two-, three-, five- and ten-year fixed-rate options.
