...Further Decline in Arrears: In July 2015, late-stage arrears were down to 1.4%, from 1.6% the previous quarter and just 1bp above the most recent floor in March 2011. Improving economic outlook and labour market conditions should result in fewer new borrowers falling into arrears. New Defaults Down: Fewer loans are rolling into default, with the constant default rate (CDR) down to 0.9%, from 1.3% a year ago. Outstanding defaults are up marginally, as recovery income remains elusive. Cheaper New Credit: The average interest rate on new residential mortgages was 2.2% in 1H15 compared to 3.1% a year ago. This significant drop in mortgage cost signals a more competitive lending environment, which Fitch expects will push new credit flows to higher levels, albeit from a low current base. Home Prices Rebound: National home prices rose by 4.2% in 2Q15 compared with 1Q15, reaching an annualised 4%, the highest observation in the INE data series since 2007....
