Huge growth in mortgage lending
Mortgage lending continued to grow at a massive rate last month with the Central Bank revealing an increase in borrowing of €1.5bn – the strongest January on record.
Despite an expected drop in the New Year, the annual rate of growth climbed to a new height of 28.8% in the first few weeks of 2006. This compared with 28.5% in December.
The unprecedented lending figures come as new a survey showed that the average price of a home for a first time buyer has topped €250,000.
According to the Permanent TSB/ESRI index, house prices overall rose by 1.2% last month, similar to the increases recorded in the final three months of 2005.
House prices for first-time buyers went up 0.7% in January, with the average price paid now at €251,281.
The annual rate of growth in January moved up to 10.2% from 9.3% in December. Permanent TSB has already predicted a growth rate of around 10% for 2006.
The Central Bank said mortgage lending remained strong last month but the traditional January effect was evident, with the monthly increase falling to €1.5bn from the record €3.5bn in December.
And it also revealed lending by finance houses increased by just over €3.4bn, or 1.3%, to €262.2bn in January.
The monthly bulletin showed residential mortgages increased by €1.6bn, overdrafts were €117m higher and loans up to and including one year grew by €182m.
