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Proportion of Irish homes in mortgage arrears at lowest level since the end of 2009

Just 39% of residential mortgage accounts in arrears in June held by banks, with the rest held by non-bank entities, Central Bank says

The number of accounts in long-term arrears stood at 20,065
The number of accounts in long-term arrears stood at 20,065
Colin Gleeson
Fri Sept 20 2024 - 12:30

The proportion of homes in mortgage arrears has fallen to its lowest level since just after the crash, new figures from the Central Bank of Ireland show.

There were 28,197 homes that had been in arrears for more than 90 days at the end of June, or 4 per cent of all “principal dwelling house” (family home) accounts, the financial regulator said on Friday. That marked the lowest proportion since the final quarter of 2009.

The data shows just 39 per cent of the accounts in arrears were held by banks, whereas 61 per cent were held by nonbank entities.

Brokers Ireland said that with a jump from 55 per cent to 61 per cent in the proportion of arrears held by nonbank entities over the past year, it would appear Ireland’s “pillar banks” were adopting a more aggressive strategy in offloading loans in arrears.

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Rachel McGovern, deputy chief executive of Brokers Ireland, noted that nonbank entities now hold 85 per cent of all family home accounts in arrears for over one year.

“Unfortunately, interest rates available in credit servicing firms can be higher than those available through the pillar banks,” she said.

In annual terms, the number of homes in arrears over 90 days fell by 4 per cent, primarily driven by a reduction in the number of accounts in arrears between five and 10 years.

The number of accounts in long-term arrears stood at 20,065, which was 2.9 per cent of all accounts. That represented a fall of 6 per cent in annual terms.

There was also a fall in the number of accounts in early arrears, which decreased by 7 per cent in the second quarter.

Of the private home accounts in arrears, 4,977, or 11 per cent, were said to be “currently part of a legal process”. Three in 10 of these have been in the legal system for more than five years, the Central Bank said.

The figures show there were 59,020 residential mortgage accounts for buy-to-let properties, with an outstanding balance of €8.6 billion. There were 8,660 buy-to-let accounts in arrears at the end of June, down 5 per cent over the quarter and 14 per cent in the year.

Noting that 17 per cent of restructured mortgages are not meeting the terms of the restructure, Brokers Ireland’s Ms McGovern said difficult legacy issues remain which “unfortunately, don’t look like they’ll be resolved any time soon” despite the “very positive personal insolvency legislation of 2012″.

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Colin Gleeson

Colin Gleeson

Colin Gleeson is an Irish Times reporter