Highest ever share of new mortgages for f irst-time buyers

FIRST-time buyers are l eading the property market’s bounce-back charge with their highest ever share of new mortgages, the latest figures show.

Almost a quarter – 24.5% – of new mortgages were for first-time buyers for new homes that qualify for the Help to Buy scheme.

And as well as representing a quarter of the number of loans, they also made up 28% of their value, according to the Banking and Payments Federation Ireland (BPFI), which publishes the figures.

It said: ‘This was the highest share by value recorded since the data series began in 2005.’

More than half of mortgages approved in September were for first-time buyers – 2,636 out of a total of 4,621 – with mover-purchasers taking out 1,191 l oans and i nvestors making up the rest.

David Hall, head of the Irish Mortgage Holders Organisation, said: ‘It’s a bounce-back but it’s a bounce-back from a very low base.’

However, the record proportion of first-time buyers snapping up new homes shows they are making use of the Help to Buy scheme.

Mr Hall added: ‘There’s a benefit there, a prop-up being given to help first-time buyers, which is what it’s designed for. It gives banks a bit more comfort with f ree money coming into the picture.

‘It gives them some reassurance. The market’s picking up and f i rst- time buyers are leading the charge, it’s still a low base but good news.’

The Help to Buy scheme gives up to €30,000 to firsttime buyers in tax relief of up to 10% of the purchase price, or 10% of valuation price upon its completion.

The number of mortgages approved last month shot up by 19% month-on-month and almost 21% year-on-year.

BPFI chief Brian Hayes said: ‘ This l atest set of figures shows a significant increase in mortgage approvals in September, with mortgage activity up over 20% on this time last year in volume terms and over 34% in value terms.

‘The increase reflects the relaxation of the Covid-19 restrictions during the summer months but also demonstrates an encouraging level of resilience in the market.

‘The drawdown figures, however, show another difficult quarter in Q3 2020.

‘It should be noted that the year- on-year decline is less than the decline we saw in the second quarter of this year.’

But as f i rst- ti me buyer numbers picked up, mover-purchase mortgages fell, with

‘Encouraging resilience’

the number of such mortgages for new properties down by 27.8% year- on-year in value terms to € 153million. The number of such mortgages also dropped, by 33% to 539.

There were 8,220 mortgage drawdowns, including remortgages, in July, August and September, valued at €1.957billion – or an average of around €238,000 each. The amount of mortgage drawdown activity fell in volume terms by 30% year-on-year.