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Number of people getting mortgage approval surges 62%

The Irish Times - The number of mortgages approved in the first three months of 2017 was up 62.1 per cent versus the same quarter in 2016 as new figures show the number of property loans drawn down rose 27.4 per cent year-on-year.

New data from the Banking and Payments Federation Ireland (BPFI) show 6,939 mortgages to the value of €1.39 billion were drawn down by borrowers during what is traditionally the weakest quarter of the year. This is up by just over 27 per cent in terms of volume and by 39.5 per cent in value versus the corresponding quarter in 2016.

They also represent declines of 23.9 per cent in volume and 23.2 per cent in value on the October to December 2016 period.

First-time buyers remain the single largest segment both in terms of volume and value, accounting for almost half of all mortgages drawn down.

Together, first-time buyers and mover-purchasers accounted for 84.5 per cent of the total value of mortgages drawn down.

The rise in approvals and draw downs come as Central Bank governor Philip Lane yesterday rejected suggestions that the economy is on the brink of another housing bubble.

He said the bank’s mortgage-lending rules will ultimately act as a drag on property prices despite CSO’s latest numbers suggest property price inflation is back in double-digit territory after nearly two years of moderate growth.

The volume and the value of re-mortgage loans continue to increase - albeit from low levels, the latest figures show.

Overall, there were 644 re-mortgage loans in the first quarter to the value of €140 million. This reflects year-on-year growth of 53.3 per cent in volume and 68.1 per cent in value.

Secondary data shows a total of 3,218 were approved per month in the first quarter, of which over half were for first-time buyers. The number of mortgages approved was up 62.1 per cent year-on-year and by 13.3 per cent month-on-month.

Mortgage approvals in March alone rose to a fresh record high of €783 million, up 103 per cent on the prior year.

The value of mortgages approved per month on average was €664 million, up 77.5 per cent year-on-year.

Following publication of the latest figures, Davy issued a revised forecast for the Irish mortgage market. It said it expects morgage lending for house purchase to top €6.4 billion this year, versus a previous forecast of €6billion.

Total mortgage lending, which includes re-mortgages and top-ups, will likely reach €7.5 billion, up from a previously forecast €6.9 billion estimate.