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Roundup- strong rise in new mortgages

Friday, February 01 08:21:01

The end of the mortgage drought has been signalled by a strong rise in the number of people approved for a home loan, an expert has said.

New figures show that 1,446 buyers got the green light from their bank for a mortgage in December, a rise of 30pc on the same month in 2011.

The value of these approvals amounted to E234m, according to the Irish Banking Federation.

It said the new figures showed continued growth in the number of mortgages approved by mainstream lenders.

But the numbers approved in December were lower than those for November, which bankers said was due to the fact that December was a shorter business month, and there was a rush in November to qualify for mortgage tax relief.

Most of those getting mortgage approval in December would have failed to qualify for the tax relief, as a mortgage had to be, not only approved, but drawn down before the end of 2012 to qualify for the relief.

So most of those getting approval in December were going ahead despite not getting tax relief.

Mortgage expert Frank Conway, of the Irish Financial Review, said this showed that the worst was over for mortgage lending. The Irish Independent

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The relatively low take-up of private pensions is a major concern for the Government, Finance Minister Michael Noonan has said.

He said it was imperative that the pension industry encourages low- and middle-income earners to invest.

Mr Noonan told a conference in central Dublin that about half of all workers aged between 20 and 69 have a private pension.

He warned that the figure may have slipped lower than this because of the financial difficulties faced by hard-pressed families.

"The fact that private pension coverage continues to be relatively low is of major concern to the Government," Mr Noonan said.

"With certainty now delivered in the area of tax relief, it is incumbent on the industry to develop competitive, cost-effective and rewarding products to encourage low- and middle-income earners to invest."

Mr Noonan said the Department of Finance had been petitioned to allow for an incentivised tax rate to apply to the budget proposal permitting savers to withdraw up to 30pc of their additional voluntary contributions.

He said he did not want to encourage people taking out money by providing tax incentives. Mr Noonan added that the renewed confidence in Ireland was coming primarily from international investors and that the pension industry had a role to play in the recovery. The Irish Independent

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Irish households and businesses are slowly extracting themselves from boom-era debts, but the national debt has hit the highest level in history.

That is according to a wealth of new data published by the Central Bank.

Total government liabilities, including the amounts taxpayers owe to the investors on the markets and owed under the EU/IMF, increased by 10pc in the last three months of 2012 to E212bn.

It is the highest debt burden ever for Irish taxpayers.

Ironically, the increase in the national debt is in part down to the country's successful return to borrowing on the markets in the second half of 2012.

The national debt is expected to peak next year. Total debt is expected to decline once the gap between the Government's income and expenditure narrows, cutting the need to borrow to fund services.

In better news, the total amount owed by households in Ireland is at the lowest level since late 2008, according to new data from the Central Bank. The Irish Independent

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Germany's finance ministry is under fire for proposing reforms to shield taxpayers from the cost of future crises that critics say are less ambitious than existing EU plans.

Berlin plans to compel lenders to hive off higher-risk trading activity from their main banking business - but only when the related assets exceed E100 billion or 20 per cent of its balance sheet.

Obligations to create a separate entity for proprietary lending above this ceiling would be likely to affect only a small number of German financial institutions. The Berlin proposal also forbids retail banks from engaging in high-frequency trading or redirecting deposits for hedge fund activities.

Similar proposals - though without the ceiling - were presented four months ago by an EU advisory group headed by Finland's central banker Erkki Liikanen.

German opposition politicians called it a "placebo" law, aimed at calming voters without providing any added protection to inconvenience banks. The Irish Times