Mortgage drawdowns decline amid shortage of second-hand homes for sale

A decline in mortgage switching activity is ‘largely’ to blame for drop-off in approvals, says BPFI

Mortgage drawdown volumes and values were down 27.3 per cent and 28.3 per cent from the final three months of 2023, the BPFI said. Photograph: iStock

A shortage of second-hand homes available for purchase is partially to blame for a steep drop in the number of mortgages approved and drawn down in the first three months of the year, mortgage brokers have said.

Their comments come as new figures from Banking and Payments Federation Ireland (BPFI) point to a slowdown in home borrowing.

Some 8,419 new mortgages with a total value of almost €2.4 million were drawn down by borrowers between January and the end of last month, according to the banking sector lobby group’s latest mortgage approvals report.

This represents a 19.8 per cent decline in volume and a 17.7 per cent decline in value compared with the same period last year, the BPFI said.


Drawdown volumes and values were also down 27.3 per cent and 28.3 per cent from the final three months of 2023.

Meanwhile, 3,779 mortgages were approved in March, up 5.5 per cent on the previous month, but down 16.4 per cent on the same month last year. The total value of home loans approved in the month was €1.1 billion, representing a decline of 15.4 per cent year on year.

Brian Hayes, chief executive of the BPFI, said the drop-off in drawdowns was largely down to the continued decline of mortgage switching activity, which has dropped off since 2022 when borrowers piled into fixed interest rate loans in advance of rising central bank interest rates.

Switching and remortgaging activity volumes slipped a further 21.5 per cent year on year in March and 26 per cent in value terms, the BPFI said.

Mortgage brokers said the shortage of available properties for purchase was also dragging on drawdown activity and mortgage applications.

“The main issue is the lack of supply of properties,” said Joey Sheahan, head of credit at online brokers “Even though brokers have been very busy with enquiries and clients are getting approval, they can’t find properties.”

Martina Hennessy, managing director of online mortgage broker Doddl, said seasonal factors may also explain the decline in drawdowns.

“As a broker ... you tend to do a huge volume of approvals and applications in the first half of the year and make your money in the second half of the year. Because mostly the second two quarters have the highest level of drawdown activity.”

She said there had been an uptick in switching inquiries in recent weeks after Bankinter, owner of Avant Money, and other smaller players in the market to cut rates in recent weeks.

Mr Hayes said despite the overall decline in activity, mortgage demand remained strong. “There were 15,297 applications to the Revenue Commissioners for the Help to Buy scheme in the first quarter of 2024, an increase of almost 60 per cent compared with the 9,585 applications made in the first quarter of 2023,” he said.

Ian Curran

Ian Curran

Ian Curran is a Business reporter with The Irish Times