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‘Concerning’ fall in mover purchase mortgage approvals in January

BPFI says need for increase in second-hand home supply is important alongside new builds

The Banking and Payments Federation Ireland report shows 3,262 mortgages were approved in January, 61% of which were for first-time buyers and 20.8% for mover purchasers

Ellen O’Regan
Fri Mar 1 2024 - 05:00

A continued decline in the number of mortgages approved for mover purchasers in January is “concerning” in light of the need for second-hand homes on the market, according to the Banking and Payments Federation Ireland (BPFI).

The latest BPFI mortgages approvals report shows 3,262 mortgages were approved in January, 61 per cent of which were for first-time buyers (FTB) and 20.8 per cent for mover purchasers.

The number of mortgages approved rose by 16.8 per cent month-on-month but fell by 11.8 per cent compared with the same period last year.

The total value of mortgages approved in January was €919 million. The value of mortgage approvals rose by 15.1 per cent month-on-month, yet fell by 9.4 per cent year-on-year.

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The value of mover purchase approvals in January decreased by 15.7 per cent year-on-year to €227 million, while the volume of approvals decreased by 17.1 per cent year-on-year to 680.

Ali Uğur, BPFI chief economist, said it was “concerning” to see a continued decline in mover purchase approvals to their lowest January volumes since 2016. “Movers play an important role in housing by bringing second-hand homes to the market, but in recent years we have seen a decline in the number of properties being advertised for sale and much of that second-hand supply has come from investors selling up. While we traditionally focus on the supply of newly-built homes, with demand for housing so strong, we need the second-hand home supply to increase as well.”

Mr Uğur said there was a continued slowdown across almost all customer segments in January, with the exception of FTB approvals which remain “robust”, increasing by 4.7 per cent year-on-year in volume to 1,991 and by 10.2 per cent in value to €577 million. “These are the highest January FTB volumes and values since the data series began in 2011. The average FTB mortgage approval value has also risen by €14,519 over 12 months to €289,971 as housing prices continue to rise.”

A total of 49,463 mortgages were approved in the 12 months ending January 2024, valued at €14.09 billion.

Residential investment letting mortgage approval volumes decreased by 36.5 per cent year-on-year to 47, and fell in value by 39.6 per cent year to €7 million.

Meanwhile remortgage/switching activity fell by 49.6 per cent in volume terms year-on-year to 338, and by 56 per cent in value to €79 million in the same period.

Ellen O'Regan

Ellen O’Regan

Ellen O’Regan is an Irish Times journalist.

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