B of I's first-time lending up 25%

Mortgage lending to first-time buyers has jumped by 25 per cent in the first quarter of 2005, according to one of the State's largest lenders.

Bank of Ireland Mortgages says it has received applications for loans in excess of €500 million in the first three months of the year from first-time buyers.

Its database indicates that first-time buyers are seeking mortgages of €200,000 on average, requiring monthly repayments of about €1,200.

The bank says that the figures reflect the increased purchasing power of first-time buyers as a result of wage inflation, low interest rates and falling stamp duty obligations.

The bank says the average combined salary of first-time mortgage applicants has jumped 64 per cent in the past decade to €64,409 from €39,251.

Average earnings for sole purchasers are €47,024 for men and €42,970 among women. The bank says that there has been a significant increase in the number of first-time buyers receiving a gift from their family to help fund their home purchase.

One in four first-time buyers received such assistance in 2004, compared to one in five in 2002. The average gift was €30,000.

The average personal savings held by applicants before applying for a mortgage was €16,500. Despite the rising cost of property, the bank's figures show that the average age of first-time applicants for mortgages has fallen - down to 32 last year from 35 in 1990.

Forty-five per cent of all mortgage applicants were buying property on their own in 2004, a rise of two percentage points since 2002. The number of people buying with family or friends has also risen by three percentage points since 2002.

Research carried out for the bank by Lansdowne Market Research indicated that first-time buyers still saw the market as buoyant and expected prices to continue rising, even if not at the levels of recent years.

Bank of Ireland Mortgages said the reduction of stamp duty on second-hand houses introduced in last December's budget has led to an increase in the number of first-time buyers in this sector.

"We are not yet seeing the full impact of the stamp duty reductions on second-hand houses," said Olive Moran, marketing manager, Bank of Ireland Mortgages.