Net mortgage lending on rise for first time since bailout

The net level of mortgage lending in the Irish economy has increased for the first time in seven years, according to new figures released by the Central Bank.

The latest money and banking statistics report shows that net mortgage lending rose by €169m or 0.2pc in the year to the end of November. While the figure is relatively small within the context of Ireland's overall mortgage market, it will be seen as both a sign of the economic recovery which has taken place since the bailout by the EU/IMF/ECB troika in 2010, and as an indicator of the more recent uptick in the country's housing market.

Up to now, the level of mortgage repayments has consistently outstripped new mortgage lending as the number of existing borrowers seeking to pay down their home loans far outweighed those entering into home ownership. According to the figures released by the Central Bank yesterday, mortgage loans, which account for 83pc of total on-balance sheet loans, increased by €105m in November alone.

While the figures for November show the level of new mortgage drawdowns is once again surpassing the level of existing loan repayments, the resurgence in the mortgage market had already been confirmed by an earlier report from the Banking and Payments Federation (BPFI).

Released last November, the BPFI figures showed that in the first 10 months of 2017, some 34,600 potential borrowers received mortgage approval - an increase of 27pc on the same period in 2016.

While not all of those being approved for a mortgage end up buying, figures from specialist bank Investec show that the number of mortgage approvals is close to the eventual number of home loan drawdowns.

Elsewhere in its report, the Central Bank said yesterday that household deposits increased by €2.6bn over 2017 to stand at just over €100bn for the third consecutive month at the end of November.

Deposits from households decreased in net terms by €548m in the month, reflecting what it termed "a seasonal trend of declines in the month of November that has been seen in recent years".

David Kieran