Bank’s lending practices have been on a rollercoaster ride that has yet to have slowed down. Due to many different economic factors, the trends tend to increase and then decrease with ease over short periods of time. The factor that has the most influence on these decisions by the bank is Brexit. Behind this name, there lies an endless amount of disruptions that are unpredictable in categorical and economic related areas and loom over every decision that the bank makes.
In general, Brexit has slowed down the lending process. That being said, there are some times in which Brexit brings about significant positive changes in the market. After the Brexit deadline was extended to October 31, 2019, there was a significant rise in the amount of lending. This change in some ways rebooted the market, given that the beginning of 2019 had a slow start.
After the extension, approvals for mortgages increased by 10pc for the year on year comparisons. There were 4,926 loans that had been approved, totaling up to €1.14 billion according to the Banking and Payments Federation Ireland; this is a 20pc increase from that of the previous month. As of late, the stats have shown that the second quarter had continued growth in the mortgage approval department.
The third quarter has just started up, and economists have predicted that the lending market will be even more populated than the previous two. A large reason for this is that the news reports that surround Brexit will begin to get more frantic as the clock ticks down to the actual event. In the meantime, people will be reading these articles and getting more and more fearful that their chances of getting a mortgage or loan will be even lower after Brexit occurs.
Additionally, many people are interested in utilizing the government run Help to Buy scheme, which aids first time buyers in the purchasing of a home by providing them with a tax rebate that is up to €20,000. The Irish government has yet to comment on the probability that this program will extend after Brexit, which has many people making sure to get homes while the getting is good.
Overall, Brexit has continued to impact the investments of banks in their consumers purchases. By being selective about how and when they invest, the banks are attempting to save themselves from the worst possible Brexit scenarios. Although until Brexit is entirely sorted out, these types of financial lending waves will continue.