Covid hits property ladder as record low of mortgages issued

THE number of mortgages loaned out during the Covid-19 crisis was almost half that of the year previous.

Worryingly, this is the largest drop ever recorded by the Central Bank.

The total was €377million in May – enough to buy 1,250 houses at an average price of €280,000 each under the Central Bank’s loan rules – which is down from €725million a year ago.

Irish Mortgage Holders’ Organisation chief David Hall said: ‘It’s no surprise, given the pandemic. 50% actually is better than most would have thought.’

Average Irish new mortgage rates of 2.87% are still among the highest in the eurozone where the average is just 1.32%. However, the Irish average rate has dropped from being the second most expensive to the fourth – behind Latvia, Greece and Estonia.

The Central Bank said yesterday: ‘The volume of new mortgage agreements amounted to €377million in May, a decrease of 48% on the same month the previous year, the largest year-onyear decline since the series began.’

Fixed-rate mortgages accounted for almost three-quarters of all new agreements in the three months to May.

This compares with 82% of new agreements in the eurozone. The weighted average interest rate on new mortgages agreed in Ireland was 2.87% in

May, up nine basis points on April. While at the same time, the average for the euro area stood at 1.32% in May.

Despite the fall in average rates charged by Irish banks, housing campaigner David Hall said: ‘We’re being constantly fleeced, we’ve no competition and we were told we have high interest rates because of mortgage arrears. Yet after banks sold those loans to vulture funds, interest rates are still high so they’re still fleecing us.’

He said there is one solution. ‘People could save hundreds a month, thousands a year, by switching,’ he said.

‘Customers need to get off their backsides and switch because they’re very slow at saving themselves money.’