Landing in reporters’ inboxes a day before the latest permanent tsb/ESRI House Price Index last week, IIB Bank’s summer mortgage market sentiment survey, unsurprisingly, doesn’t make for good reading.

The survey, conducted in association with the Irish Mortgage Advisers Federation, indicates bad news for investors and first time buyers, with brokers indicating that there’s “no quick fix” to the market’s current problems in sight.

The survey, which gathered the views of 200 mortgage brokers from around the country between June 6th and 13th suggests a “marked weakening” in the mortgage market over the past three months.

“Clearly, the credit crunch has become the key driver of Irish mortgage market weakness of late,” said IIB Chief Economist Austin Hughes, who conducted the survey.

“With no sign of an early ending of global money market strains, the likelihood is that tighter and more expensive credit will continue to weigh on the mortgage market.

“By extension, the credit crunch will also weaken the broader Irish economy in months ahead.”

The survey contains a number of interesting findings, including:

* “The number of mortgage brokers reporting weaker conditions roughly doubled to 67 per cent while the number of firms seeing stronger business levels is four times fewer than three months ago at just 10 per cent of survey respondents.”

* While there’s been a slowdown in mortgage market activity, “it remains unclear as to how sharp the downsizing is and how far from a turning point we might be”. Citing Central Bank data, “the pace of growth in lending has slipped to 11.4 per cent from a 30 per cent pace as recently as Spring 2006”.

* “Some 57 per cent (of respondents) expect a further decline in activity levels, compared to just 10 per cent in the previous survey…so the summer 2008 survey results suggest mortgage brokers expect a marked further deterioration in the months ahead.”

* “The increase in (loan) top-ups probably reflects a far greater tendency to redecorate and refurbish rather than move home. At the margin, it may also hint at debt consolidation. On the other hand, the sharply reduced share of refinancing activity is entirely consistent with the sharp back-up in interest rates that has dramatically reduced the attractiveness of refinancing.”

* “Notably reduced availability of funding, together with higher funding costs have significantly diminished prospective property purchasers access to the Irish mortgage market.”

While the Government cannot directly alter the market’s condition, 83 per cent of survey respondents “feel that sound management of the economy can make a significant difference to mortgage market prospects”.

Said IMAF President Paul Short: “It is obvious that tighter credit conditions are preventing many prospective purchasers from accessing financing at present…

“A staggering 86 per cent of brokers say that tighter credit conditions have been very important in the slowdown seen in recent months.

“Indeed brokers suggest reduced access has been more important than the combined impact of weaker demand and rising interest rates.”