The Banking and Payments Federation has released data this morning which shows there were €391m mortgage approvals for house purchase in April 2015, down from €424m the previous month.

Furthermore, the value of mortgage approvals in April was still up 12.0% on the year, but this is a sharp slowdown from the 60% growth rates recorded in Q1 2015. The annual growth in mortgage approvals in April was the weakest since December 2013.
 
Mortgage approvals were 2,070 in April in volume terms, down from 2,228 in March. This means the number of approvals is up 11.4% on the year but slowing from the 40.6% annual growth in Q1 2015. The average loan approval was €188,900, down from €190,300 in March and €195,650 on average through the first quarter of 2015.

According to Davy Stockbrokers, "One obvious explanation for the weak April data is that the negative impact on lending from the Central Bank’s new limits on loan-to-value (LTV) ratios is starting to be felt. Our estimate is that 28% of mortgage loans in 2014 would have breached these limits, well in excess of the 15% allowed to do so. That said, half of the 28% were first-time-buyers who would have faced only a small reduction in their LTV ratio of less than 3%. It could also be that mortgage approvals and lending were rushed before the new rules came into force.

Our forecast was for mortgage lending to equal €4.5bn in calendar year 2015. We already know lending was still strong in Q1 2015 at €918m, up 70% year-on-year and broadly consistent with our forecast. However, the April mortgage approvals figures show little sign of the normal seasonal pick-up in the second quarter. Unless approvals start to pick up through May and June, we will have to revise down our forecast for mortgage lending in 2015 towards €4bn."

Source: www.businessworld.ie