There was a surge in mortgage approvals in Ireland in the three months ending January 2017, according to Banking & Payments Federation Ireland's (BPFI) new figures.

Relaxed rules, first-time buyer (FTB) incentives and Ireland's continued economic recovery are bringing buyers back to the market.

The number of mortgages approved increased by 40.7% year-on-year - 48.2% were FTBs.

The value of mortgage approvals rose by 53.2% in 12 months.

FTB and mover purchases were again the fastest growing segments in January 2017, rising by 64.8% and 46.1% year-on-year.

The value of FTB draw downs was up by 12% year-on-year. This could be an early indication that the Government's help to buy scheme is pushing up prices.

Dermot O'Leary, chief economist with Goodbody warns that it is too early to draw conclusions:

"Average loan sizes continue to grow at a faster pace in the FTB category ... This has been a feature for some time so [it] cannot be automatically attributed to the introduction of the Help-to-Buy scheme."

Goodbody forecasts that the total value of mortgage drawdowns will be €7bn in 2017, up 22% year-on-year.

"On the basis of recent trends, these forecasts may be exceeded, returning the mortgage market to 'normality' sooner than expected," Mr O'Leary added.

More than 3,000 mortgages were approved, on average during the three months.