First-time buyers driving rise in mortgage market
FIRST-TIME buyers continue to drive the mortgage market.
They drew down almost 6,400 mortgages in the last three months of last year, up 635 on the same quarter the previous year.
There has also been a rise in the number of first-time buyers being approved for a home loan, but who have yet to draw it down.
New buyers account for half of all mortgages given out by banks, according to the Banking and Payments Federation.
The rest are for movers, those switching and people who are topping up an existing home loan.
Some 12,259 new mortgages to the value of €2.77bn were drawn down by all borrowers during the fourth quarter of 2019. This represents an increase of 1.2pc in volume and 5pc in value on the corresponding quarter of 2018.
A total of 2,964 mortgages were approved last December. Half of these were accounted for by first-time buyers, while mover-purchasers accounted for a quarter, according to the banking body.
The number of mortgages approved rose by 1.9pc year-onyear, but fell by 29pc compared with the previous month. This reflects seasonal trends generally seen at that time of year.
An approval is a firm offer by a lender that it is likely to issue a mortgage if the buyer finds a property they can afford.
Meanwhile, there has been a marginal fall in the number of mortgage holders in long-term arrears.
Just short of 27,900 mortgage holders are more than two years behind on their payments, according to new figures from the Central Bank.
This was a fall of 750 in the July to September period when compared with the previous quarter last year. The Central Bank said the figure had “decreased marginally”.
These people are at high risk of losing their homes.
These accounts that are in long-term arrears represent some 45pc of all accounts in arrears, the Central Bank said.
When it comes to those who are more than three months in arrears, there was a larger fall.
The total who are more than 90 days in arrears fell by 1,500 in the third quarter to 43,518.
This country’s mortgage arrears issue has proved stubbornly hard to deal with despite strong personal insolvency legislation being introduced that allows those in deep debt to have some of it written off, if they are unable to make the repayments.
Almost 88,600 mortgage accounts had the repayment schedule restructured by the lender, with 86pc deemed to be meeting the terms of the new agreement.
Vulture funds, or what the Central Bank calls non-bank entities, hold almost half of all those accounts that are in arrears. This is despite holding only 12pc of all residential mortgages.