Competition authority looks at how to improve mortgage market

A public consultation to see how Ireland can develop a better-functioning, more sustainable mortgage market has been published.

Carried out by the Competition and Consumer Protection Commission (CCPC), it examines market structure, legislation and regulation to see how Ireland performs compared to other markets.

The commission is now seeking feedback on the study, which began in December after it was requested under the programme for Government. As part of its consultation, the CCPC has been in contact with industry experts, consumer bodies, mortgage providers, lenders in other markets and potential new entrants, to seek to understand how the market operates.

It is working with the Central Bank to set out options for the Government in terms of market structure, legislation and regulation to lower the cost of secured mortgage lending and improve competition and consumer protection.

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Among areas covered in the consultation are the regulatory environment, barriers to entry, switching and the implications of Brexit on Ireland’s mortgage market.

Supply and demand

A report published by international ratings agency Standard & Poor’s last week suggested it may take another decade before supply matches demand in the Irish property market. It noted that private investment in housing, in real terms, had fallen by 80 per cent from its peak in early 2006 to its trough in 2012

The forecast comes as figures from the Central Statistics Office (CSO), show property prices nationally rose by 8.1 per cent last year, while prices in the capital climbed 5.7 per cent.

Moreover, the latest data from the Central Bank of Ireland shows more than €11.3 billion worth of mortgages were in arrears of 90 days or more at the end of September 2016.

"A mortgage is likely to be the biggest financial commitment most people make in their lifetime. We know that the Irish mortgage market has undergone a period of crisis and that currently it is highly concentrated. This impacts on consumers, both in terms of the options available to them when taking out a mortgage and those considering switching. It also has an impact on the likelihood of new firms entering the market and providing choice, product innovation and competition," said Isolde Goggins, chairwoman of the CCPC.

Responses to the consultation are invited in writing by 5pm on March 20th with a final report due two months later.