A new survey of independent brokers has found that the majority of people seeking mortgages are finding it harder than ever to get loan approvals.
The study by PIBA - the Professional Insurance Brokers Association, covered the third quarter of this year and found that more than 55 per cent of brokers reported between 60 and 80 per cent of cases submitted to lenders were declined. This marks an increase of more than five per cent on the previous quarter and 13 per cent on quarter one 2011.
Rachel Doyle, director of PIBA Mortgage Services, stated: “The bank lending situation continues to deteriorate. The Irish Banking Federation recently admitted that mortgage lending is down 94 per cent since the peak in 2005.
“In our surveys quarter two marked a discernible slide over quarter one and now we are seeing a further deterioration in quarter three. Lenders are placing every impediment in the way of those seeking mortgages.
“In the main those seeking mortgages are not imprudent borrowers but people with the capacity to repay loans at a time when affordability has improved greatly. Banks to a very large degree are not interested in lending for mortgages.”
Ms Doyle added: “While the recent budget measures to assist those taking out mortgages in 2012 are positive steps, the Government is going to have to take a harder line with the banks. It also needs to spell out what type of residential lending targets will be put in place to ensure prudent lending happens.”
She said the prospect of achieving a normal functioning banking system “does not seem to be on the horizon at present and it is adversely affecting the economy and preventing the property market from bottoming out”.
The survey found that almost 74 per cent of brokers say that it takes four months or longer to process a mortgage, up almost nine per cent on the previous quarter which was up almost six per cent on quarter one of 2011.
Asked about the role of NAMA almost 54 per cent of brokers said it will not assist in getting the property market moving while more than 26 per cent believed it would; 20 per cent felt it would have no impact at all.
