One of the biggest complaints about the property market in recent years has been the availability of mortgage finance from our lenders.
After the over-zealous nature of lending during the boom years, it was always going to be the case that the banks would be more cautious but, if anything, it went to the opposite extreme where getting finance – no matter how good your savings and credit rating – proved an incredibly tough task.
The banks tell us they are back lending again though. Ulster Bank are claiming that eight out of every 10 first-time buyer applications are being granted mortgage approval at present, while AIB are saying their figures are four out of five approvals.
These effectively equate to the same amount but both suggest that mortgage finance is available once more.
That has been reflected in the Irish Banking Federation’s latest report, which shows that year-on-year the number of mortgages approved by our banks is up 32.6 on the same period of last year.
That is a positive for the market and for society in general. Not everyone might agree with it but if you want to own your own home and have the finance to do so then who could begrudge you it?
The bigger issue now is stock or a lack there of. What often happens nowadays is that once people get mortgage approval they enter a bidding process or go in search of their new home. If they don’t find that home or prove successful in obtaining it within a certain period though then they have to go through the approval process once more.
That has led to at least one lender extending the amount of time that your approval lasts for.
Certainly, stock appears to be an issue when it comes to the mortgage market at present. Despite interest and prices soaring once more in Dublin and in other parts of the country, the IBF figures showed that mortgage approvals were down 5.9% last month.
The lack of stock is having an issue on this without question.
The banks are slowly but surely loosening the purse strings but while a year-on-year rise of 32.6% is to be welcomed, it must be remembered this figure is coming off an incredibly low base.
Until larger problems such as negative equity are sorted there will continue to be problems. The banks should be commended for lending once more but they can solve a lot more problems too and they need to work on these to help the market and, indeed, the country to see a real recovery.