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Bank has £200m for home buyers

Bank of Ireland UK is setting aside £200m for mortgage lending in Northern Ireland in what it says is a bid to kick-start the sluggish market.

The bank said it hoped the finance for first-time buyers, home movers and those wanting to remortgage would entice people back into the housing market.

Regional manager Pat Byrne said: "While there is strong value in the market for many potential buyers, we believe that people who want to borrow may perceive that banks are not willing to lend.

"That is not the case and by allocating £200m for mortgage lending between now and the end of next year we are making clear our commitment to house buyers and seeking to provide some stimulus to the local housing market."

Mr Byrne said the bank was approving "three out of four" of mortgage applications it receives.

Economist John Simpson said: "This scheme is a significant addition to the availability of finance to try and rejuvenate the home owner market - even though by not revealing rates, the bank does not indicate how competitive the new mortgages will be."

Many banks and building societies from Santander to Nationwide have announced increase to their standard variable rates in recent weeks and months, but Bank of Ireland UK said it had "no plans" to push up rates for its Northern Ireland lenders.

Among the other three major banks in Northern Ireland, First Trust said it had not set aside money specifically for mortgages but that it had a range of mortgage products.

Northern Bank said it had approved £400m of mortgages in 2011, up 39% on the year before. At the beginning of this year, Ulster Bank announced it was removing arrangement fees for its residential mortgages for a limited period and cutting rates on its fixed rate products.

According to the Council of Mortgage Lenders, 1,900 loans worth £170m were taken out for house purchases in Northern Ireland in the second quarter of 2012.

That was down from 2,100 loans of £190m in the first quarter, and 2,100 loans worth £210m in the second quarter of 2011.