Value of mortgage arrears ‘continues on downward trend’

Irish households are continuing to reduce outstanding credit balances, according to new data from the Central Bank, with falls across mortgage and nonmortgage markets.

Total lending for house purchase amounted to approximately €114.3 billion in the first quarter of this year, having fallen year-on-year from €121.8 billion in Q1 2014. This is well below the peak of €149.1 billion recorded in Q1 2009. Consumer credit amounted to €11.4 billion in the first quarter, having declined from a peak of €28.2 billion in Q1 2009.

In its latest Household Credit Market Report, the Central Bank presents data which shows the overall value of mortgage arrears continues on a downward trend. It has fallen from €23.7 billion in the fourth quarter of 2014 to €22.4 billion in first quarter of 2015, representing 17 per cent of total mortgage balances.

The overall value of mortgage arrears peaked at over €27.6 billion in the third quarter of 2013 or approximately 21 per cent of all loans.

However, the data also shows that over 40 per cent of mortgages taken out in 2007 were still in negative equity at December 2014.

The data shows there has been an increase in the value of new lending between the first quarter of 2014 and the same period this year, from €568 million to €983 million. This follows an increase in new home loans from 3,425 to 5,618 in the same period.