Family homes in mortgage arrears decline in first quarter

Central Bank: more than 120,000 mortgages on principal dwellings are restructured

A total of 120,894 mortgages on principal dwellings were classified as restructured as at the end of March.

A total of 120,894 mortgages on principal dwellings were classified as restructured as at the end of March.

 

More than one in 10 mortgages on a main family home was in arrears at the end of March, the latest Central Bank figures show.

This represented a drop of 1.4 per cent relative to December 2016, with more than 76,000 (10 per cent) of accounts in arrears at the end of March.

The total value of accounts in arrears for more than three months was €10.7 billion. This represented 53,100 accounts (7 per cent of all family home mortgages), reflecting a quarter-on-quarter decline of 2.2 per cent. The Central Bank said this represented the 14th consecutive decline in the number of principal dwelling houses with accounts in arrears over 90 days.

However, accounts in arrears of up to 90 days increased slightly in the first quarter – the second successive increase in this category, the bank said.

The bank noted that the value of accounts in longer term arrears over one year remained “large” at just under €8.8 billion at the end of March.

A total of 120,894 mortgages on principal dwellings were classified as restructured as at the end of March. Of these restructured accounts, 87 per cent were deemed to be meeting the terms of their current restructuring arrangement, down slightly from the previous quarter.

Some 7,474 new restructuring arrangements were agreed during the first quarter, the lowest recorded since the end of September 2012.

During the first quarter, legal proceedings were issued to enforce the debt or security on a principal dwelling mortgage on 1,645 accounts. There were 605 mortgage accounts where court proceedings concluded but arrears remained outstanding.

Repossession orders

The courts granted an order for repossession or sale of 278 properties in the first quarter of the year. A total of 370 properties were taken into possession by lenders during the quarter, down from 455 properties in the previous quarter.

Of the properties taken into possession during the first three months of 2017, 142 were repossessed on foot of a court order and the remaining 228 were voluntarily surrendered or abandoned. Lenders were in possession of a total of 1,740 family homes at the end of March.

According to the Central Bank, there were 734,106 private residential mortgage accounts for principal dwellings in the Republic at the end of March, to a value of €99 billion. Of this total stock, 76,422 accounts were in arrears, representing a fall of 1,071 or 1.4 per cent over the quarter.

Buy-to-let mortgages

The number of buy-to-let mortgage accounts in arrears over 90 days decreased by 2.4 per cent during the first quarter. At the end of March there were 14,367 buy-to-let accounts in arrears over 720 days, with an outstanding balance of €4.2 billion, equivalent to 18 per cent of the total outstanding balance on all buy-to-let mortgages.

At the end of the first quarter, there were 128,149 residential mortgage accounts for buy-to-let properties held in the Republic to a value of €23.4 billion. Some 19 per cent of these were in arrears, a decrease of 2.6 per cent on the previous quarter.

Non-bank entities now hold 48,315 mortgage accounts for principal dwellings and buy-to-let properties combined. The remainder are held by unregulated loan owners.

Fianna Fáil finance spokesman Michael McGrath said that with 33,000 family home mortgages in arrears of two years or more, the Government and the Central Bank needed to place a greater emphasis on resolving these cases.

“This involves using more long-term restructuring arrangements, clarifying the role of split mortgages following the recent High Court decision and revamping the mortgage-to-rent scheme to make it genuinely fit for purpose,” he said.

Noting that more than 12,000 family home mortgages were now owned by unregulated funds, Mr McGrath said the funds should be brought fully within the ambit of Irish regulation.