In a document submitted to the Oireachtas finance committee, Ulster Bank reports that their new mortgage lending has increased by 49 percent. This follows on the Central Bank’s loosened rules on lending.
Less Strict Lending Rules
The Central Bank of Ireland announced in November a loosening of the rules around new mortgage lending. It dropped the minimum deposit amount from 20% to 10% of the total property price, irrelevant of the market value of the property. This now means that first -time buyers will have a better chance of getting a mortgage.
Lending Increase Impact
Garry Mallon, chief executive of , said that the new mortgage lending increase figures were based against the third quarter of 2016. He went on to explain that their share of new mortgage lending had increased from 14 to 19 percent of the total new mortgage market in the Republic. Mr Mallon said that, at this time, it was too early to tell whether the loosened rules were a “help or hindrance”.
In his opening statement to the committee, he said that the bank is committed to serving the Irish public, and being competitive in the Irish banking market. He also stated that the bank was confident about the future, and would be running the business efficiently using the strength , Ulster Bank’s parent company, can provide and expanding on the key market opportunites.
Most Expensive Rates
Ulster bank has a varied suite of mortgages on its books, with its standard variable rate (SVR) being the most expensive at 4.3 percent. The bank informed the committee that they had advised their SVR customers that they could move to a lower rate of interest package with no penalty in April 2015. However, to date there had been very little interest in the offer.
Ulster Bank also stated in the report that although the market was relatively sound, there was still a lot of uncertainty surrounding the impact of the British pull-out from the EU. The “Brexit”, as it has become known, has had a major impact on the national economy and the overall housing market nationwide. Its impact on the Irish economy has yet to be fully determined. Combined with the tax legislation changes in property investment, there could be some “potential downside risk”.
Business Lending Increased
Ulster bank have stated that their new lending to small-medium enterprises (SMEs) has also shown a marked increase. Their focus on the “work with and support” initiative has proved to be effective, increasing the new lending by over 40 percent on the 2015 figures.
All of this comes on the back of the sale by Ulster Bank of €2.5 billion in loans to financial group Cerberus in October 2016. Ulster Bank confirmed that the portfolio was mostly impaired business loans, with around 900 personal home loans included. Overall, the bank said it was “satisfied” with the current state of the property market, especially in urbanised areas.
Ulster Bank, which has been operating and providing bank services for more than 180 years, currently has 110 branches, and more than 3,000 employees.
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