The volume of new Irish mortgage lending more than halved in 2009 compared with 2008.

About 46,000 mortgage loans were drawn down in 2009, 58.5% fewer than in 2008. In value terms, the average mortgage issued last year fell back to 2005 levels.

According to new figures from the Irish Banking Federation and Pricewaterhouse Coopers, the volume of new lending fell by 18% in the last three months of last year to a total value of €1.76 billion.

The IBF/PwC Irish Mortgage Market Profile shows that close on 10,000 new mortgages to the 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 at a value of over €8 billion; and the overall mortgage book now stands at €148 billion. The volume of new lending in Q4 2009 is down 18% compared to the previous quarter and is down 47% year on year – a trend clearly reflecting the general economic environment.  However, the year-on-year decline in lending eased again in this latest quarter.

The following are among the key features of the Q4 data:

• First-time buyers (FTBs) have continued to increase their share of the overall market – albeit a smaller market.  They are now the single largest segment of the market by volume at 35% and by value at 41%. 
• The key home purchaser segments of the market – FTBs and Mover Purchasers – together now account for 70% of the market by value and 57% by volume.  This means that nearly three-quarters of all mortgage credit issued and more than half of all new mortgages now go to the home purchasing segment.   
• The average values of mortgages issued are back to levels last seen in early 2005.

EBS has grown its share of the retail mortgage market to 21.3% - an increase of over 7% since 2008. Its share of the overall market has grown to a significant 17.1% - a 5.6% increase over this time last year. Quarter four 2009 market share figures are 27.9% for the retail market and 20.7% for the overall market a significant increase over and above the same period in 2008.

Commenting on the data, IBF Chief Executive, Pat Farrell, stated: “The data illustrates how difficult a period 2009 was for the mortgage market, but there have also been some reassuring signs of late: most notably, the ever-increasing share of the overall market accounted for by home purchasers; and the moderation evident over recent quarters in the overall rate of decline in market activity.  The general economic situation, consumer confidence, the unsold housing stock and house price movements will be among the factors to influence market activity in 2010.  Meanwhile, our sector continues to do everything possible to support homeowners who are experiencing difficulties.”