Net mortgage lending rises for fifth successive month

Lending for house purchase increased by €184 million in March, marking the fifth consecutive month of positive annual growth.

The Central Bank’s latest money and banking statistics show that net mortgage lending, effectively new drawdowns less repayments on existing loans, rose by 0.2 per cent year on year in March.

Until recently new mortgage lending was eclipsed by the property owners paying down existing loans as overindebted households attempted to deleverage, resulting in negative growth. The latest figures suggest this long period of contraction is now over.

The Central Bank numbers indicate mortgage lending accounts for 83 per cent of banks' total on-balance sheet loans, increased by €190 million in March.

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The figures show that household deposits increased in net terms by €889 million in March. Annually, household deposit lodgements were €3.6 billion higher than withdrawals, resulting in growth of 3.7 per cent.

At its latest macro-prudential meeting in March, Central Bank officials noted that credit growth, although strengthening, was not excessive at this juncture.

However, it noted there was a build-up of “cyclical systemic risks” in the Irish economy.

Nonetheless it left its control on bank credit, known as the countercyclical capital buffer (CCyB), unchanged at 0 per cent for the second quarter of 2018.