First increase in eight years sees €27m rise in mortgage lending

Lending for house purchases increased by €27 million over the final quarter of 2016, the first net increase since the end of 2009, according to new figures from the Central Statistics Office (CSO).

However, mortgages in the buy-to-let sector have decreased by €394 million during the same period.

The Trends in Private Household Credit and Deposits data published on Monday show that mortgages for private homes recorded the largest net increase since the CSO studies began in March 2011, with a positive net flow of €449 million.

Fixed-rate loans for private homes recorded a net increase of €657 million over the quarter, in contrast to floating rate loans, which recorded a fall of €208 million.

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“This reflects a current trend by borrowers to enter fixed-rate contracts in the current lower interest rate environment,” the Central Bank said.

In annual terms, the fixed-rate loans recorded a net increase of €1.6 billion (21.3 per cent), while, conversely, floating-rate loans declined by €1.2 billion (2.3 per cent) over the same period.

In the buy-to-let sector, mortgages recorded a year-on-year decline of €1.3 billion, or 9 per cent, by the end of December.

For this sector of the market, floating-rate loans declined, in net terms, by €400 million (2.9 per cent). The total outstanding stock of securitised loans for house purchases stood at €33.3 billion at the end of December.

There was an increase of€175 million in the stock over the quarter. Total loans for house purchase, including both on-balance sheet and securitised mortgages, stood at €106.7 billion at the end of the last quarter.