Mortgage Market Activity Remains Subdued

May 17, 2011

• 3,259 new mortgages issued in Q1 2011 to a value of €577 million
• Home purchasers continue to dominate the market

The IBF/PwC Mortgage Market Profile published today shows that 3,259 new mortgages to the value of €577 million were issued during the first quarter of 2011.

The volume of new lending is down 42% compared to the previous quarter and is down 53.1% on the previous year.  While the seasonal pattern of mortgage lending typically results in a lower level of lending in the first three months of the year compared to other quarters, this more pronounced reduction in activity reflects the broader macroeconomic environment.

However, the key home purchaser segments of the market, First Time Buyers and Mover Purchasers, continue to dominate this smaller market.  Together they now account for over 77% of the market by value and 67% by volume.  In effect, more than three-quarters of all mortgage credit issued now goes to the home purchasing segments of the market.

Lenders generally continue to report subdued underlying demand for new mortgage finance.  This has been influenced by uncertainty around macroeconomic developments, property price trends and future interest rate movements.  At the same time, lenders continue to point to the need for prudent lending with the all-important focus on the borrower’s employment situation and capacity to repay.

Commenting on the data, IBF Chief Executive, Pat Farrell, stated:

“The economic situation remains challenging and prudence remains the order of the day.  For customers that means manageable borrowing and for financial institutions it means prudent lending.”

The IBF/PwC Mortgage Market Profile can be viewed on the IBF website here.

Note:  The Irish Banking Federation (IBF) is the leading representative body for the banking and financial services sector in Ireland, representing over 70 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.  

Further Information: Felix O’Regan, Head of PR and Public Affairs, IBF, tel. 6715311.