THE 50 per cent-plus drop in new mortgages in 2009 has mortgage brokers frothing at the mouth and who could blame them. This week they said they were “alarmed” at the fall-off in business, both for new and second-hand homes and, more dramatically, for investment properties.

The director of the Professional Insurance Brokers Association Mortgage Services, Rachel Doyle, was highly critical of the banks this week, saying that they are not functioning as they should, though this is hardly news to the property industry or to buyers waiting to negotiate a mortgage. A survey by the PIBA has found that between 60 and 80 per cent of mortgage applications are being turned down by lenders, largely because of a lack of savings, and the unease about job security. She accused the banks of cherry-picking while others did not wish to lend at all. She said that first-time buyers were finding it particularly difficult to get onto the property ladder at a time when prices are “close to, if not at, the bottom of the market”.

The warning will not surprise observers who have watched one mortgage shop after another close down in Dublin and the provinces. At the height of the boom mortgage brokers were earning almost as much as, if not more than, estate agents on each house sale. The downturn has put so many of them out of business, however, that lenders may not use intermediaries in future and negotiate directly with the clients.