Growth in mortgage approvals driven by sharp increase in switching activity
The number of first time buyers being approved for a mortgage has dropped to its lowest level since 2019, new figures from Banking and Payments Federation Ireland show.
The latest BPFI figures also reveal that the number of people switching mortgages continued to rise in October.
Last month, a total of 5,349 mortgages were approved.
44% of the approvals went to first time buyers, while almost 19% went to mover purchasers as people continue to switch mortgage providers.
There was no change in the number of mortgages approved when compared to the previous month, but volumes jumped 17% compared to the same time last year.
In total, the mortgages approved last month were valued at over €1.4 billion.
This was down slightly on the previous month, but up 23% on the same time last year.
Today’s figures show that non-purchase mortgage activity, which includes switching and top-ups, grew by 124% in volume terms when compared to October 2021.
Brian Hayes, BPFI’s chief executive, said the latest mortgage data shows continued growth in mortgage activity driven solely by a sharp increase in non-purchase mortgages – mainly switching.
Mr Hayes noted that for the first time since 2011, non-purchase mortgages accounted for more than one third of both the volume (35.7%) and the value (34%) of monthly approvals.
“It is clear that customers are actively managing their mortgages by seeking out new deals to minimise the impact of ECB interest rate decisions and this is further evidenced by separate data from the Central Bank of Ireland which shows that the value of mortgages renegotiated on fixed-rate terms more than trebled between the third quarter of 2021 and the third quarter of 2022 to €1.7 billion,” Mr Hayes said.
In contrast, first time buyers approval volumes were the lowest for October since 2019.
“Looking at the annualised figures, which allows us to more accurately assess emerging key trends, both FTB and mover purchase approval volumes in the 12 months ending October 2022 were the lowest since the 12 months ending May 2021, with activity returning to pre-Covid levels,” he said.
“However, in value terms, FTB approvals remained close to the peak of €7.7 billion in August 2022, reflecting the sharp increase in housing prices since 2021,” he added.