Mortgage lending drops almost 50%

Mortgage lending has fallen by almost 50 per cent in the twelve months to the end of 2009, according to research by the Irish Banking Federation and PWC.

The volume of new mortgage lending fell by 18 per cent in the fourth quarter of 2009, compared to the previous quarter according to the latest IBF/PwC Mortgage Market Profile. This means that overall lending is down 47 per cent year on year, although the yearly decline in lending did ease in this latest quarter.

Almost 10,000 new mortgages, representing a combined value of €1.76 billion, were issued during the fourth quarter of 2009. This brings to some 46,000 the total number of new mortgages issued in 2009.

The overall mortgage book now stands at €148 billion, while the average values of mortgages issued are back to levels last seen in early 2005.

First-time buyers have continued to increase their share of the overall market. They are now the single largest segment of the market by volume at 35 per cent and by value at 41 per cent according to the data.

Chief Executive of the Irish Banking Federation, Pat Farrell, said that while the data illustrates the difficulties experienced in the market in 2009, there was also "some reassuring signs of late" such as the moderation evident over recent quarters in the overall rate of decline in market activity and "the ever-increasing share of  the overall market accounted for by home purchasers."