Business

First-time buyer activity drives mortgage approvals in February

Approval activity up 6% in volume and 7% in value compared with same month last year, according to banks’ data

Figures from lobby group Banking and Payments Federation Ireland show 3,582 mortgage approvals, valued at just over €1bn in February. Photograph: iStock

Colin Gleeson
Wed Mar 27 2024 - 06:00

First-time buyer activity drove mortgage approval activity up by 6 per cent in volume and by 7 per cent in value in February compared with the same month last year, new data from Banking and Payments Federation Ireland (BPFI) shows.

The figures from the lobby group show there were 3,582 mortgage approvals, valued at just over €1 billion in the month. BPFI chief executive Brian Hayes said the data shows that the mortgage market “regained positive momentum” in February.

There were 2,922 purchase mortgage approvals, valued at €873 million, while purchase mortgage approval activity rose in volume terms by 7.5 per cent year-on-year and increased in value terms by 9.7 per cent over the same period.

First-time buyers continued to drive the market, with 2,171 mortgages approved in February valued at €640 million, a jump of 14.7 per cent and 19.8 per cent year-on-year in volume and value terms, and the highest February levels since the data series began in 2011.

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In annualised terms, there were 30,821 first-time buyer mortgage approvals valued at almost €9 billion in the 12 months ending February, which was the highest level since the data series began in 2011.

“We can also see that first-time buyer demand remains very strong with 12,355 help-to-buy applications to the Revenue Commissioners in the first two months of the year,” said Mr Hayes.

“By contrast, we seen a continued decrease in mover purchase volumes, which dropped by 8.4 per cent year on year to 695, the lowest February level since 2016.

“This has ongoing implications for the supply of second-hand homes to the market which has been slowing down in recent months and the Central Statistics Office reported a 6 per cent year-on-year drop in household purchases of existing homes in January.”

Mr Hayes said the supply pipeline for new housing “expanded significantly” with 7,056 new dwellings commenced in the first two months of 2024, which was 72 per cent higher than in the same period of 2023, according to the Department of Housing.

About half of the new housing starts in the year to date were for scheme houses and 40 per cent for apartments.

The data shows residential investment letting mortgage approval volumes fell by 13.8 per cent year-on-year to 56.

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The number of switching and remortgage approvals rose by 0.5 per cent year on year to 432. The number of top-up approvals fell by 1.3 per cent year on year to 228.

The value of mortgage approvals for property purchase increased by 9.7 per cent year on year to €873 million.

The value of first-time buyer mortgage approvals increased by 19.8 per cent year on year to €640 million, while the value of mover purchase approvals decreased by 12.5 per cent year on year to €221 million.

Residential investment letting mortgage approval values increased by 29.1 per cent year on year to €12 million.

Switching and remortgage approval values fell by 7.1 per cent year on year to €105 million. Top-up approval values rose by 6.1 per cent year on year to €34 million.

There were 49,667 mortgage approvals in the 12 months ending February, valued at €14.1 billion.

Annualised mortgage approval activity to end-February increased in volume terms by 0.41 per cent compared with the 12 months ending January and increased in value terms by 0.47 per cent over the same period.

Annualised purchase mortgage approval volumes rose by 0.48 per cent compared with the prior period to 42,604 in the 12 months ending February, while the annualised value of purchase mortgage approvals was €12.8 billion, up by 0.61 per cent over the same period.

Colin Gleeson

Colin Gleeson

Colin Gleeson is an Irish Times reporter

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