Strong demand drives mortgage activity

Banking and Payments Federation Ireland figures indicate rise in number and value of mortgages in February

The number and value of mortgage approvals rose in February as the State’s housing market continues to be driven by strong demand.

Figures from the Banking and Payments Federation Ireland (BPFI) show a total of 3,894 mortgages were approved last month, 7.5 per cent up on the previous month.

First-time buyers were approved for 2,053 mortgages (52.7 per cent of the total), while mover purchasers accounted for 848 (21.8 per cent).

In value terms the mortgages approved were worth €1.03 billion, which was 10.3 per cent up month-on-month.

The figures also show remortgage/switching grew by 42.9 per cent to 719 in volume terms year-on-year.

BPFI chief executive Brian Hayes said the figures pointed "to a continued strong pipeline for drawdown as the year progresses".

He said the increase in switching activity was “a reflection both on the competition in the market right now and the fact that mortgage customers are actively shopping around for these better rates”.

“This comes at a time when mortgage customers are increasingly using fixed-rate mortgages,” Mr Hayes said.

Recent data from the Central Bank of Ireland suggested that fixed-rate mortgages (fixed for more than one year) accounted for almost half (46 per cent) of outstanding mortgage value at the end of 2021, up from 25 per cent three years earlier.

“With consumers keenly aware of the rising cost of living, we encourage mortgage customers to review their rate type and level regularly, and compare them with the other products available,” he said.

Separate figures from rival websites MyHome and Daft pointed to an acceleration in house price growth in the first quarter on the back of record low levels of supply.

"We continue to see huge demand, many applicants with significant savings, and a lot of approvals for first-time buyers," Joey Sheahan, head of credit at online broker MyMortgages.ie said.

“However, a large portion of these prospective homeowners are having real trouble securing a property, and renewals of mortgage approvals are becoming increasingly common. All of which is due to the high demand and relatively slow supply.”

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