Mortgage approvals jump in October as value also rises

The number of mortgages approved in October rose substantially with the value also surged, new figures show.

A total of 4,236 mortgage applications were granted during the month, up 11.4 per cent on September and by 13.6 per cent year-on-year.

Some 2,014 of all approvals granted were for first-time buyers, according to data from the Banking and Payments Federation Ireland .

Just under €930 million worth of mortgages received approval. This marks an 11.4 per cent rise in value year-on-year and a 13 per cent increase versus the prior month.

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“It is well known that some of the banks (over)used exemptions outside the macroprudential rules for loan-to-income ratios early in the year and were forced to close off for exemptions over the summer,” said Goodbody chief economist Dermot O’Leary.

“As we noted previously, it is possible that some banks were overly cautious in that regard and may be opening again towards the end of the year or believe that these mortgages will likely be drawn down in 2019 in any case.”

The annualised volume of mortgage approvals reached 45,316 in the 12 months to the end of October, while the value of such approvals exceeded €10 billion for the first time since the federation began keeping records in 2011.

“Accounting for more than 47 per cent of all approvals, first-time buyers remain by far the single largest segment of market activity,” said Felix O’Regan, the BPFI’s director of public affairs.

‘Clearer picture’

“Looking at the figures on an annualised basis provides a clearer picture of overall trends however. This shows that all segments of the mortgage market contributed to an overall increase in annualised approval volumes and values in the 12 months to end-October 2018.”

Home buyer approvals, which include first-time buyers and mover purchasers, increased in volume by 0.6 per cent to 34,728 on an annual basis. Approvals for switching increased by 4.2 per cent to 5,655.