Mortgage approvals are increasing once more

By September 19, 2017Articles
New figures released by the Banking and Payments Federation Ireland (BPFI) have shown that the number of mortgages that are approved has risen by more than 17 percent, year-on-year, to July 2017. The new data shows that there is a “continuing strong demand” for new mortgages in the country.

BPFI is the main voice of banking in Ireland

The Banking and Payments Federation Ireland is the main voice of banking and payments in the country and represents more than seventy domestic and international banking corporations. in total, around 3,970 mortgages were approved for lending in July 2017, 2,022 of which were for first-time buyers, accounting for 50.9 percent of the total. Mover purchase mortgages accounted for another 31.3 percent of the total, with 1,244 new mortgages for those moving houses. However, while there was a year-by-year increase in mortgages to July, the total for the month was down from June by eight percent.

Report shows values of new mortgages

The report, which is issued every month through Irish firm, Investec, produced insightful figures for the banking and mortgage industry, which will help in making decisions on future investments and mortgage approvals. The total value of mortgages for July, according to the report, equated to over 853 million Euros. Of that total, 424 million Euros was taken up by first-time buyers, while 319 million Euros was accounted for by movers. This means that, although the total year-on-year value of mortgage approvals has risen by 23.3 percent, the month-on-month totals have actually dropped by 8.1 percent from the start of the year.

In other sections of the report, data was provided for other areas of banking and mortgages, which included data showing that re-mortgaging or switching had increased on their year-on-year basis, and accounted for 7.5 percent of the value of new mortgages, and around 8 percent of the volume of new mortgages. Investec noted in the report that the data shown confirmed their previous findings, as well as their anecdotal evidence, that there was a continued strong demand for new mortgage drawdown within the sector.

Flurry of activity after government budget announcement

The report also explained how the BPFI data shows the total value of new mortgages at 5.3 billion Euros over the first half of the year, an increase of around forty-six percent on the same period in the previous year. While the trend for new mortgages is still on a slightly downward glide path, it was only to be expected, considering the huge flurry of new mortgage applications and approvals over the period from October 2016 to March 2017. The sudden upturn in the applications and approvals was mainly due to the new rules covering the government’s “Help-To-Buy Scheme”, which was announced as part of the October 2016 budget announcements.

Government scheme helps new home buyers

The Help-To-Buy Scheme, which was launched around the UK and Ireland last year, allows first-time buyers to loan up to 20 percent of the cost of their new home, meaning they will only need to pay a five percent cash deposit and can get a better mortgage for the other 75 percent of the value of the property. The main benefit of the Help-To-Buy Scheme is that first-time buyers will not pay interest on the loan, and there are no fees for the first five years of owning their own home. This makes it much easier for first-time buyers to finally get on the property ladder.

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