DUBLIN (Reuters) - Ireland's permanent tsb (PTSB) will cut mortgage rates for new customers from next week, becoming the latest lender to do so amid intensifying competition in a recovering property market.
State-owned ptsb, which is seeking to raise at least 100 million euros (78 million pounds) of capital after failing European bank stress tests last year, said on Monday that it will cut its range of rates for new homeowners by up to 0.42 percentage points.
It follows a cut by another state-owned bank, Allied Irish Banks, which in October bucked the trend of lenders not passing on lower European Central Bank interest rates to consumers and cut its standard variable rate mortgage by 0.25 percentage points.
Permanent tsb's variable rate for new customers where the loan is 50 percent or less of the value of the property will be 3.76 percentage points, down 0.36 percentage points. Customers with a loan-to-value ratio of 70 to 80 percent will pay 4.07 percent, a cut of 0.42 points.
House prices in Ireland are rebounding after a crash in property prices six years ago. They rose 16 percent in the past year, although prices in the fastest recovering market, Dublin, failed to rise for the first time in eight months in November.
In a further sign that the recovery may be slowing, property website Daft.ie said on Monday that asking prices for Irish homes fell by 1 percent in the final quarter of 2014, the first quarterly drop since mid-2013.
Daft, which advertises nine out of every 10 properties for sale in Ireland, attributed the fall to proposed Irish central bank restrictions on mortgage lending, which are due to be brought in early this year. Daft said the changes had already altered buyer expectations.
(Reporting by Padraic Halpin; Editing by Larry King)