Non-bank lenders such as ICS are struggling in an environment of rising rates, so cannot take advantage of imminent departure of Ulster Bank and KBCDilosk, the first lender to enter the Irish mortgage market after a slew of exits in the wake of the property crash, has hit the brakes – for now, at least – just as new home lending is on track this year to reach levels last seen in 2008.
The Government experienced rising market rates first hand on Thursday when it had to pay a rate of almost 2.22 per cent to sell benchmark bonds, due in 2032, in an auction News this week that euro zone inflation hit a record 9.1 per cent in August – a multiple of the ECB’s 2 per cent target, and fuelled by soaring energy prices – has prompted a raft of economists to predict the central bank’s governing council will follow up July’s half a percentage point increase to its main rates with an aggressive 0.75 point hike next week.
There has been strong speculation in the market that ICS’s recent move to pull back sharply on new lending was down to it maxing out its banking credit facilities at a time when the RMBS market, while not entirely closed, isn’t exactly inviting.