Mortgage approvals increase... but there are no homes to buy!

THE pent-up demand in the housing market is fleshed out by new figures which show the total sum of money approved for mortgages last month rose by 45% compared to a year ago.

There were more than 4,100 mortgages approved in May, with more than half of them for first-time buyers, according to statistics from the Banking & Payments Federation Ireland. The total sum approved in May was €884million, up €275million on May last year.

Yet despite the amount approved by the banks, the actual drawdown of cash for purchases is low, according to the Irish Mortgage Holders Organisation.

IMHO chief David Hall said: ‘Approvals are up but drawdowns are low.

‘The banks can approve anything they want but there’s nothing to buy, supply of homes is low. It shows that demand is massive, and with supply low it’ll fuel price rises and rent rises. They are going to go up, up, up.’

The BPFI report for May also found the number of mortgages approved rose by almost 36% year-on-year and by 23.5% month-on-month. Of the €884million approved for mortgages last month, €448million (50.7%) was for first-time buyers and €327million (37%) was for homeowners moving house.

Re-mortgage or switching approvals grew year-on-year, accounting for 7.5% of the value and 7.6% of the number of mortgages last month.