First-time buyers drive growth in mortgage values and volumes

Banking & Payments Federation Ireland publishes figures for fourth quarter of 2019

First-time buyers drove increases in the volume and value of mortgage drawdowns during the final quarter of last year, new figures show.

The Banking & Payments Federation Ireland (BPFI), which represents the banking, payments and fintech sectors in Ireland, published its figures for the final three months of 2019 on Tuesday.

Some 12,259 new mortgages to the value of €2.8 billion were drawn down by borrowers. That represented an increase of 1.2 per cent in volume and 5 per cent in value on the corresponding quarter of 2018.

It also represents an increase of 3.9 per cent in volume and 4.9 per cent in value compared with the previous quarter. First-time buyers remained the single largest segment by volume (52 per cent) and by value (53 per cent).


Figures from BPFI also show there was incremental growth in drawdowns in each quarter of 2019.

In addition, BPFI also published its figures for December. A total of 2,964 mortgages were approved in the month, with 1,531 were for first-time buyers, representing 51.7 per cent of total volume. Mover purchasers, meanwhile, accounted for 763 (25.7 per cent).

The number of mortgages approved rose by 1.9 per cent year-on-year but fell by 29.1 per cent compared with the previous month.

Seasonal trends

BPFI said this reflected “the seasonal trends” generally seen at this time of year. In the past four years, approval volumes have dropped by 28-30 per cent between November and December.

Mortgages approved in December 2019 were valued at €696 million, of which first-time buyers accounted for €362 million (52 per cent) and €204 million by mover purchasers (29.4 per cent).

The value of mortgage approvals rose by 6.1 per cent year-on-year but fell by 27.5 per cent month-on-month – again “due to seasonal factors”.

Annualised mortgage approval activity to end-December 2019 increased – doing so in volume terms by 0.11 per cent compared with the twelve months ending November 2019.

In a recent interview with The Irish Times, the Minister for Finance Paschal Donohoe described the Central Bank's mortgage rules as "appropriate" in spite of them being criticised by construction industry figures as being too restrictive.

The Construction Industry Federation (CIF) has previously called for the introduction of a Government-backed shared-equity scheme to help first-time buyers get on the property ladder.

It said the current mortgage-lending rules, which restrict lending for most borrowers to 3.5 times income, are too onerous and leave many couples in a state of “rental purgatory” – paying high rent while unable to save for a deposit.


In a pre-election submission, it called for the establishment of a State-backed loan scheme, over and above the existing help-to-buy scheme, to help FTBs purchase a home.

That would involve the State taking a small stake in newly-built houses to reduce the level of deposit required to secure a mortgage.

Separately, the number of mortgages in arrears under 90 days fell in the third quarter of 2019, but long-term arrears fell only marginally, new data from the Central Bank showed yesterday.

The number of repossessions also fell during the three-month period, with a total of 80 properties taken over by lenders in the third quarter. That compares to 224 in the previous quarter of the year.

Colin Gleeson

Colin Gleeson

Colin Gleeson is an Irish Times reporter