New research from the Central Bank shows that demand for bank loans has fallen sharply.
The study, published on the Central Bank’s website, shows that from the middle of March enquiries about loans from both personal customers and businesses fell as containment measures to tackle Covid-19 were introduced.
Mortgage enquiries fell by almost 20% from the middle of February to the middle of March.
The Central Bank said it believes this will have implications for the housing market later this year.
However, there was an increase in the actual amount of mortgage lending in March indicating that people who were at an advanced stage of purchasing a property followed through on their transactions.
The research also shows a 25% reduction in enquiries about personal loans in the same period. The Central Bank believes this could be due to fewer people intending to borrow for holidays.
There has also been a decrease in demand for car loans. The demand for all three categories of loans continued to decline up to the middle of April.
The Central Bank noted a spike in demand for overdrafts from both consumers and businesses in the middle of March but this too has fallen.
Excluding overdrafts, the demand for finance from businesses was down 41% in early April, compared to the same time in February.
The Central Bank suggests this may show that companies are pulling back on investment, taking “a precautionary position” or are facing financial pressures.
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