Mortgage figures published by the Irish banks' industry group this week raised as many questions as they answered.
As usual, the Banking and Payments Federation of Ireland (BPFI) focused on first-time buyers, who account for around 50 per cent of the market. First-time buyers are important: they are the lifeblood of the banks when it comes to mortgage lending and, in the middle of a housing crisis when many despair of ever owning their own home, assuring this group that the banks are open for lending is very important.
However, there was really very little news in this segment. They remain the biggest market as they have been consistently in recent years and that’s about it, nothing more to say.
But there were some interesting trends in the figures. There was a noticeable and unusual decline in the number of people applying for mortgages to move homes. Why? It's impossible to say from the figures as they don't come with any context but, in part households emerging from the uncertainty of Covid lockdowns may be content to hold what they have rather than having the confidence to extend themselves in the market.
And then, of course, there is the paucity of supply.
The other really interesting figure was the sharp increase in the number of people either remortgaging their properties or switching their home loans – up over 37 per cent on the same time last year and now accounting for close to one in five mortgage approvals.
This could be in part due to the imminent departure of both Ulster Bank and KBC from the Irish market or, again, there might be a Covid factor. Many households found themselves on State wage supports during the pandemic, effectively shutting them out of the market.
Now that the working world has returned to something closer to normal there is pent-up demand from those looking to switch to cheaper rates or, perhaps, to remortgage in order to upgrade. Especially as the data say fewer people are moving.
Along with the lack of context the other caveat, of course, is that these BPFI figures are for approvals. As many who tried to draw down previously approved mortgage loans during the pandemic discovered, approvals can count for little when push comes to shove.
