Growth in mortgage approvals slows in May
The growth in mortgage approvals tailed off slightly last month despite an increase of more than 20% on an annual basis.
A total of 2,461 mortgages were approved in May, according to new figures released by the Banking and Payments Federation Ireland.
On a monthly basis, mortgage approvals climbed 4.6%.
The annual rate of growth, although still significant during May, represented a slowdown on the previous month’s figures, when a year-on-year increase of close to 32% was recorded.
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Analysts indicated yesterday that the Central Bank’s new mortgage lending restrictions may be having an impact in quelling the availability of credit.
The caps, which were finalised in January and which were aimed at curbing the increase in credit, introduced an 80% loan-to-value (LTV) limit for prospective homebuyers, bar those seeking to purchase their first home.
In addition to the LTV measure which requires buyers to stump up a 20% deposit, a loan-to-income cap of 3.5 was also introduced.
The measures may have also encouraged potential borrowers to bring forward approvals from last year into early 2015 in anticipation of tighter credit conditions, according to Davy Stockbrokers chief economist Conall Mac Coille.
The full impact of the new rules will probably not be known until data for the second half of the year is available, however.
The value of mortgages approved per month, on average, in the three months ending May 2015 was €452m, of which €421m (93%) was for house purchase.
The value of mortgage approvals increased by more than 26% year-on-year and by 2.5% on a monthly basis.
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