Mortgage arrears drop again in first quarter

The number of residential mortgages in arrears fell for the eleventh consecutive quarter in the first quarter of the year, down to 85,989, new figures from the Central Bank show. However, arrears of more than 720 days now constitute 42 per cent of all accounts in arrears - up from 40.4 per cent previously.

As of end-March 2016, some 85,989 mortgages on primary residences were in arrears, a reduction of 2.6 per cent on the fourth quarter of 2015. Mortgages in arrears now represent 11 per cent of total mortgages. The figures show that the decline was across all categories of arrears, including the over 720 days’ category, which fell for the third consecutive quarter. However, accounts in arrears over 720 days now constitute 42 per cent of all accounts in arrears - up from 40.4 per cent in the previous quarter - and 86 per cent of arrears outstanding.

The figures point to a continued decline in the number mortgages in arrears of over 90 days falling by 3.6 per cent from Q4 2015 to 59,696. This marks the tenth consecutive decline in the number of PDH accounts in arrears over 90 days and this category now represents 8 per cent of total mortgages

The figures also show a decline of 3.5 per cent in the number of investment mortgages that are in arrears. At end-March there were 14,924 buy-to-let mortgages in arrears over 720 days, with an outstanding balance of € 4.4 billion. This represents 17 per cent of the total outstanding balance on all BTL mortgage accounts. Figures for the first quarter also show a turnaround in the number of properties where a rent receiver was appointed, with a decrease of 4.8 per cent compared with an increase of 30.5 per cent in the previous quarter.

Non-bank entities now hold 47,409 mortgage accounts- primary residence and buy-to-let combined - or 5 per cent of the total stock of mortgages. Of this, almost 20,000 were in arrears of more than 90 days, with 13,013 of these in arrears over 720 days at endMarch. It is likely that as banks, including Ulster Bank, sell on distressed mortgages to third party buyers, the number of mortgages in this category will continue to rise.

Restructurings and legal proceedings

Some 120,447 PDH mortgage accounts were categorised as restructured at end-March 2016, a decline of just 292 accounts compared to end-December 2015. Of these, 87 per cent were deemed to be meeting the terms of their current restructure arrangement; the highest level since the series began. The largest increases in restructures were recorded in the categories of arrears capitalisation and permanent split mortgages.

During the first quarter of 2016, legal proceedings were issued to enforce the debt/security on primary residential mortgage mortgage in 1,895 cases. In 277 cases the Courts granted an order for repossession or sale of the property and there were 1,760 properties in the banks’ possession at the beginning of the quarter. A total of 421 properties were taken into possession by lenders during the quarter, of which 139 (down from 162 Q4 2015)were repossessed on foot of a Court Order, while the remaining 282 (up from 178 Q4 2015) were voluntarily surrendered or abandoned. During the quarter 391 (down from 538 in Q4 2015) properties were disposed of.