First-time buyers drive mortgage activity as switching levels plummet
The number of mortgage approvals has fallen 20% in past year even as first time loans continue to grow, results of a new survey showed.
The number of mortgage approvals has fallen 20% in past year even as first time loans continue to grow, results of a new survey showed.
The number of mortgage approvals for first-time buyers that have been buying or building their own homes in this period climbed to a record level of 30,508, while the value of those approvals rose to more than €8.7bn, according to the latest Mortgage Approvals Report by the Banking and Payments Federation Ireland, or BPFI.
BPFI chief executive Brian Hayes said first-time homeowners have defied the “overall slowdown” in the mortgage market, which has been hit by a trending decline in switching activity.
The number of re-mortgaging agreements fell by 78% and by 81.5% in value terms during the last 12 months.
More people are looking to purchase their first home as the volume of mortgage agreements for first-time buyers has grown nine out of the 10 months this year. However, soaring demand has led to higher prices for these customers.
The average mortgage value for a first-time homeowner reached €295,033, some €27,000 more than in October last year.
In monthly terms, a total of 4,273 mortgages were approved in October and first-time buyers accounted for more the 62% of the total volume.
The total value of mortgages during this period reached €1.2m, rising 2.7%.
However, the value of mortgages fell an overall 17% in annual terms.
“Looking ahead, while the pipeline for drawdowns remains solid to the end of 2023, continued supply of new and secondhand housing will be needed to meet robust demand in 2024,” said Mr Hayes.
The BPFI has over 125 member institutions.
