EU Mortgage Lending Slowed In First Quarter

According to the summary of the 12 page report on the mortgage lending situation int he EU states in the first quarter of 2009, in most Member States year-on-year growth rates in outstanding mortgage lending were still positive albeit slowing down.

Year-on-year declines in new lending continued to be observed in almost all EU markets (with the exception of Denmark) bringing values to early 2000s levels. House prices fell further in year-on-year terms in all EU markets surveyed, with the exception of Poland.

Mortgage rates continued to decrease as a response to the record cuts in central banks interest rates in the first months of 2009.

Most EU markets still recorded positive increases on the same quarter of the previous year, albeit lower than those that were observed in last quarter of 2008. Only Italy recorded a higher year on year increase in Q1 2009 than in Q4 2008.

In UK mortgage lending, expressed in Sterling, increased by 2.2 percent year on year, but if expressed in Euro values the lending rates fell by 15.1 percent. In Poland, year on year growth in mortgage lending almost halved in comparison with Q4 2008, but largely outpaces that of EU 15 markets.

As regards new lending, the trend of previous quarters continued and most markets recorded more pronounced falls on the previous year than in Q4 2008, except for Denmark. In Denmark new lending increased by 17.5 percent.

The full report can be seen here (PDF).

Prepared by Armen Hareyan