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Loans to Irish households down 4pc in 13

Thursday, March 06 11:10:21

Lending to Irish households fell by 4pc last year with mortgage lending down 3pc, latest figures from the Central Bank revealed today.

Total credit to Irish private households outstanding on the balance sheet of resident credit institutions was E98.7 billion at end-December 2013, representing a quarterly decline of 0.9pc and an annual decline of 4pc.

The total amount of loans outstanding for house purchase, including loans that have been securitised and continue to be serviced by resident credit institutions, stood at E122.6 billion at end-December 2013, down from E123.7 billion in Q3.

The total deposits held in resident credit institutions by Irish private households were E85.8 billion at end-Q4 2013, representing an annual decrease of 1.1pc.

The annual rate of change in loans for house purchase was minus 3pc at end-December 2013, following a decline of 2.4pc in Q3.

There was a quarterly decline of 0.8pc, which represents the sixteenth consecutive quarterly decline.

The outstanding amount of on-balance sheet loans for house purchase stood at E83.3 billion at end-December. A further E39.3 billion of securitised mortgages, which continue to be serviced by resident credit institutions, are also outstanding.

Floating rate mortgages, which include standard variable rate, tracker rate, and mortgages with a fixed rate up to one year, accounted for 93pc of the outstanding amount of loans for house purchase at end-December 2013 - a decline of E489 million over the quarter.

Tracker mortgages alone accounted for 50pc of outstanding house purchase loans and recorded a E937 million decrease in Q4. Standard variable rate mortgages increased by E477 million during Q4, and accounted for 42pc of outstanding house purchase loans at end-December.

Fixed rate mortgages accounted for 7pc of the outstanding amount of loans for house purchase at end-December 2013, following a net decline of E217 million during the quarter. The quarter-on-quarter decline was mainly driven by the over three and up to five year fixed rate category which registered a net decline of E142 million.

Loans for principal dwellings, which accounted for 75pc of loans for house purchase at end-December, fell by E264 million over the quarter. This reflected a fall of E199 million in fixed rate mortgages and a fall of E64 million in floating rate mortgages. The annual rate of decline in loans for principal dwellings was 2.2pc in Q4 2013, which follows a decline of 1.9pc in Q3.

Standard variable mortgages on principal dwellings increased by E559 million during Q4, while tracker mortgages, and mortgages fixed for up to one year fell by E595 million and E29 million, respectively. Floating rate mortgages accounted for 92pc of the on-balance sheet outstanding amount of loans for principal dwellings at end-December. Of these floating rate loans 50pc were tracker mortgages, 48pc were standard variable and 2pc were up to one year fixed. For securitised mortgage pools, the share of floating rate mortgages for principal dwellings was slightly higher at 96pc. The outstanding amount of loans for buy-to-let residential properties (representing 24pc of loans for house purchase) fell by E383 million to stand at E19.6 billion at end-December. This decline reflected a fall of E366 million in floating rate mortgages, the majority of which was seen in the tracker mortgage category. Floating rate mortgages accounted for 96pc of the outstanding amount of loans for buy-to-let properties at end-Q4. These floating rate loans were composed of 64pc tracker mortgages and 36pc standard variable mortgages. There was an annual decline of 5.1pc in loans for buy-to-let residential properties at end-Q4.

Loans for holiday homes/second homes accounted for 1pc of loans for house purchase at end-December 2013. Floating rate mortgages accounted for 95pc of the outstanding amount of loans for holiday homes/second homes at end-December. Of these floating rate loans 57pc were tracker mortgages and 43pc were standard variable mortgages. The annual decline in loans for holiday homes/second homes was 12.2pc at end-December 2013.