The IBF/PwC Mortgage Market Profile published today shows that 6,043 new mortgages to the value of almost €1 billion were issued during the fourth quarter of 2012. This represents an increase of over 51% on the previous quarter and an increase of over 56% on Q4 in 2011.
It brings to 15,881 the total number of new mortgages issued in 2012 compared to 14,273 during 2011. This is the first year-on-year increase in annual volumes in new mortgage lending since 2006.
The key home purchaser segments of the market – first-time buyers and mover-purchasers – are by far the most significant drivers of the increase in what is now a smaller market in terms of overall activity. Together they now account for around 9 of every 10 new mortgages issued. First-time buyers loan volumes alone have reached their highest level since Q4 2008.
There is considerable seasonality in the mortgage market: Q4 is normally the strongest quarter and Q1 the weakest. However, volumes were boosted in Q4 2012 by an exceptional level of activity related to the expiration of mortgage interest relief. The average first time buyer’s loan now stands at just over €154,000, reflecting house prices in the market and increased affordability.
Commenting on the latest data, Pat Farrell, IBF Chief Executive, stated: “The Q4 figures were particularly strong and IBF members worked hard to enable customers to draw down their mortgages in time to avail of mortgage interest relief before the qualification period expired.
“The continued increase in the number of new mortgages drawn down by borrowers points to a market that is moving from stabilisation into recovery, supported as it is by a certain levelling of house prices, improved borrower sentiment and the increased availability of finance from lenders. Sustaining this trend over coming quarters will be dependent on maintaining the conditions necessary to underpin a healthy, fully-functioning secured credit market.
“In relation to the overall mortgage market in general a number of key policy issues need to be addressed: namely, clear policy support for the prioritisation of secured over unsecured credit as the new personal insolvency regime unfolds and urgent action on the Dunne judgement.”