The Irish Banking Federation has this morning published its lending statistics for mortgages for Q4, 2010 and they show that transactions are grinding to a halt. Just 4,024 mortgages were advanced during the quarter for the purchase of property. This is down 87% from peak in 2006 when over 30,000 mortgages were advanced for property purchase in one quarter, but perhaps more importantly down 21% from the previous quarter three, 2010. The number of all new mortgage lending including top-ups and remortgages stood at 5,624 down 90% from peak and 23% from the previous quarter.
The euro amount advanced during the quarter has also fallen off a cliff with the total being 94% off peak 21% off the previous quarter. Just €805m was advanced for property purchases, down from almost €8bn in 2006.
The average sum advanced continues to bear up despite the fall-off in transactions and the average 39% decline in property values since the peak at the start of 2007. The average advanced for a first time buyer mortgage during Q4, 2010 was €185,000 down just 13% from peak and 2% from the previous quarter. The average mortgage for movers was €225,000 down just 5% from peak and 4% from the previous quarter. Average buy to let mortgages at €189,000 are down 29% from peak but up 12% from the previous quarter. Average top-ups and remortgages are also up on the previous quarter. It should be noted that lending criteria have sharply tightened since the peak with mortgage providers typically seeking 75% loan to values when advancing mortgages, down from a not-unusual 100% at the peak.
Commenting on the latest figures this morning, the long-standing IBF chief executive Pat Farrell said “Against a very challenging economic background it can come as little surprise that mortgage market activity remains weak. The impact of the last Budget on consumer spending, the reduced level of consumer confidence during Q4 2010as reflected in the 44.4 low recorded in December in the KBC Ireland/ESRI Consumer Sentiment Index and continuing uncertainty around future employment prospects are among the factors that have made manageable borrowing and prudent lending an ongoing challenge”
NAMA Wine Lake 