Danske Bank: Interest rate hikes have not deterred NI homebuyers

Danske Bank said the Northern Ireland housing market remained "buoyant" in 2022 with mortgage lending approvals up 25 per cent year-on-year.

RISING interest rates did little to deter Northern Ireland homebuyers in early 2022, new figures from Danske Bank suggest.

Posting its financial performance for the first quarter of the year, the lender said mortgage approvals were up by 25 per cent on the same period last year.

However, Danske Bank said the vast majority of Northern Ireland homebuyers are now opting for fixed rate mortgages.

Some 88 per cent of the bank’s customers went for a fixed option in the first quarter.

It comes after interest rates in the UK went from 0.25 per cent in December 2021 to 0.75 per cent in March 2022

Analysts are forecasting that the Bank of England could take the rate to 1 per cent for the first time since February 2009, when its Monetary Policy Committee meets on Thursday (May 5).

The head of Danske Bank’s UK operation, Vicky Davies, said the north’s housing market “remained buoyant in 2022”, adding that “successive Bank of England rate rises have not impacted transaction levels”.

The Danish-owned lender said improvements in the Northern Ireland economy saw its pre-tax profits rise to £16.7 million in the first quarter, six per cent higher than the same period in 2021.

The lender’s income for its Northern Ireland business grew 13.8 per cent year-on-year to £53.5m

Ms Davies said after holding off on expansion plans during the pandemic, its lending data pointed to small and medium sized firms beginning to invest again in the first quarter.

When the UK Government-backed bounce back loans were excluded, Danske Bank said lending to SMEs was up 36 per cent year-on-year.

However, it said lending to larger businesses remained “subdued due to many continuing to carry excess liquidity”.

“Russia’s invasion of Ukraine has introduced additional economic uncertainty – adding to existing challenges associated with the pandemic, Brexit, supply chain constraints and rising inflation,” said Ms Davies.

“We continue to monitor these factors closely, in particular how our personal customers are being impacted by rising costs of living, and heightened cost burdens for business customers.

“Despite prevailing local and global economic challenges, we remain well positioned to continue to support our customers and the wider economy over the year ahead.”

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