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Approved mortgages up 17% year-on-year in July

Just over half of mortgages accounted for by first-time buyers, new figures show

Investec said the data confirmed “continuing strong demand” for new mortgage drawdowns. Photograph: Peter Byrne/PA

The number of mortgages approved rose by 17 per cent year-on-year during July, according to the latest figures from the Banking & Payments Federation Ireland (BPFI).

A total of 3,970 mortgages were approved in July 2017, with just over half these accounted for by first-time buyers. Individuals moving house accounted for 1,244 (31.3 per cent).

While mortgage approvals were up year-on-year in July, they were down by 8 per cent compared with June.

The value of mortgages approved equated to €853 million – of which €424 million (49.7 per cent) was accounted for by first-time buyers and €319 million (37.4 per cent) by movers.

The value of mortgage approvals rose by 23.3 per cent year-on-year and declined by 8.1 per cent month-on-month.

Re-mortgage/switching approvals grew on a year-on-year basis with activity accounting for 7.5 per cent of the value and 8 per cent of the volume of mortgages.

In a note, Investec said the data confirmed previous data and anecdotal evidence of “continuing strong demand” for new mortgage drawdowns.

Flurry of applications

“BPFI data shows mortgage approvals at €5.3 billion in the first seven months of the year, up 46 per cent on the same period last year (previously up 51 per cent at end June),” it said.

“Though the trend for new approvals continues to glide lower, this is to be expected given the flurry of applications and approvals at the end of last year and the start of this year, as a result of the Government’s Help-to-Buy scheme, which was announced in October’s budget.”

The analyst said the data was “consistent with the strong growth forecast we have for new mortgage drawdowns this year”.

Goodbody chief economist Dermot O’Leary said a “key take away” from the data was how the number of approvals for first-time buyers continues to exceed the addition to the housing stock.

“Ongoing price inflation is inevitable as this money chases a limited amount of properties,” he said.

“We are forecasting 30 per cent growth in gross new lending this year. Although there is a gap opening up between approvals and drawdowns due to limited supply, this looks achievable at this stage and will contribute to net lending growth in the banking system for the first time in eight years.”

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