Record-Breaking Mortgage Approvals Surpass €1bn In January

In January 2022, the Irish mortgage industry saw a surge in mortgage approvals, with a record-breaking €1 billion in approvals released by the Banking & Payments Federation Ireland (BPFI).

The data reveals that 3,697 mortgages were approved, with over half of them being for first-time buyers, accounting for a total value of €520 million. This marks an increase of 2.1% from January of the previous year, and a 1.7% increase from December to January.

The value of approved mortgages also saw a year-on-year rise of 8.9%, making it the highest value of annualized mortgage approvals since data series began in 2011.

Despite a slowdown in the non-purchase mortgage segment, the data presents a promising outlook for the Irish mortgage industry, offering ample opportunities for those looking to enter the market.

This article will delve into the key insights from the data and explore the implications of the record-breaking mortgage approvals for the industry, homebuyers, and the wider economy.

Total Mortgage Value

Despite concerns over the impact of COVID-19 on the housing market, the total value of mortgage approvals in January 2023 reached a record-breaking €1 billion, indicating a robust and flourishing mortgage industry in Ireland.

Of this total value, €810 million was approved for property purchase, which saw a year-on-year increase of 10%.

The remaining €205 million was approved for non-purchase mortgage activity, which also saw an increase of 4.6% year-on-year.

This significant growth in the value of approved mortgages is a positive sign for the Irish economy as it suggests that consumer confidence is increasing and people are more willing to invest in property.

With the value of annualized mortgage approvals reaching almost €16 billion, this data series since 2011 has never seen such a high value of approvals.

It is clear that the Irish mortgage industry is thriving and presents a wealth of opportunities for those looking to enter the market.

Number of Approved Mortgages

The number of approved mortgages in the month of January increased by a modest 2.1% from the previous year and 1.7% from the previous month. A total of 3,697 mortgages were approved, with first-time buyers accounting for 51% of the approvals. This indicates a continued demand for housing in Ireland, despite the ongoing pandemic and economic uncertainty.

To provide a clearer picture of the breakdown of approved mortgages in January, the following table shows the number of mortgages approved for first-time buyers and mover purchases, as well as the total value of those mortgages:

As the table shows, first-time buyers accounted for the majority of approved mortgages in January. This highlights the importance of government initiatives aimed at supporting first-time buyers, such as the Help to Buy scheme and the Rebuilding Ireland Home Loan, in facilitating access to the housing market for younger and lower-income individuals.

First-Time Buyers

Notably, the data reveals that first-time buyers accounted for over half of the approved mortgages in January, indicating a significant demand for entry-level properties in the Irish housing market. These buyers represented a total value of €520 million in mortgage approvals, which is a substantial contribution to the overall value of approvals for property purchase. This trend is likely driven by a combination of factors, including low interest rates, government incentives, and a growing desire for home ownership among younger generations.

The high proportion of first-time buyers also suggests that there may be a shortage of affordable properties in the market. This could be a concern for policymakers, as it may make it more difficult for younger people to enter the housing market and achieve financial stability. However, it also presents an opportunity for developers and investors to focus on creating more affordable housing options to meet this demand.

Overall, the data on first-time buyers highlights the importance of understanding the changing dynamics of the Irish housing market and its impact on different segments of the population.

Year-on-Year Increases

Interestingly, the year-on-year increase in approved mortgages for property purchase in January was significantly higher than the growth seen in non-purchase mortgage activity, with the former experiencing a remarkable surge of almost 10%.

This implies that there has been a strong demand for property purchase, which could be attributed to several factors such as low-interest rates and an increase in disposable income. The data also suggests that first-time buyers played a significant role in this growth, accounting for a total value of €520 million.

Moreover, the value of approved mortgages has seen a year-on-year jump of 8.9%, indicating that the mortgage industry is experiencing a positive trend. The increase in the number of approved mortgages could also be attributed to the government’s policies aimed at increasing homeownership rates.

Overall, this year-on-year increase in approved mortgages for property purchase is a promising sign for the mortgage industry, and there are plenty of opportunities for those looking to enter the market.

• Sub-list 1: Factors contributing to the year-on-year increase in approved mortgages for property purchase in January
• Low-interest rates
• Increase in disposable income
• Government policies aimed at increasing homeownership rates
• Sub-list 2: Implications of the year-on-year increase in approved mortgages for property purchase in January
• Strong demand for property purchase
• Positive trend for the mortgage industry
• Plenty of opportunities for those looking to enter the market.

Implications for the Industry

From an industry perspective, the year-on-year increase in approved mortgages for property purchase in January offers a glimmer of hope amidst the uncertainty caused by the pandemic, akin to a lone flower blooming in a barren field. The increase of 10% in the value of approvals for property purchase, to €810 million, is a positive sign for the mortgage industry, as it suggests that the market is picking up after a period of slowdown. The total number of approved mortgages rose by 2.1% from the same period last year, and the value of mortgages approved saw a year-on-year jump of 8.9%.

To better understand the implications of these figures, we can refer to the following table, which displays the number and value of approved mortgages by type of buyer and by purpose. The data shows that first-time buyers accounted for over half of the approved mortgages, with a total value of €520 million. This suggests that the government’s various initiatives to support first-time buyers, such as the Help-to-Buy scheme, are having a positive impact. Moreover, the increase in non-purchase mortgage activity, which grew by 2.1% year-on-year in volume terms to 877, indicates that there is still demand for other types of mortgages, such as remortgages or top-ups, which could be a source of revenue for lenders.