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Over 5,200 mortgages approved in October, with surge driven by first-time buyers

October was the busiest month for mortgage approvals since BPFI began collecting this data in 2011.

File photo of houses for sale in Dublin.
File photo of houses for sale in Dublin.
Image: Mark Stedman/Photocall Ireland

MORE THAN 5,200 mortgages were approved in Ireland in October, according to figures released by Banking & Payments Federation Ireland (BPFI) today.

A total of 5,207 mortgages were approved in October – first-time buyers (FTBs) were approved for 3,041 mortgages (58.4% of the total volume) and mover-purchasers accounted for 1,267 (24.3%).

It was the busiest month for mortgage approvals since BPFI, which represents the banking, payments and fintech sector in Ireland, began collecting this data in 2011.

The number of mortgages approved in October rose by 12.7% month-on-month and by 15.4% compared with the same period last year.

Mortgages approved in October 2020 were valued at €1.25 billion – of which FTBs accounted for €774 million (59.4%) and mover-purchasers for €344 million (27.5%).

The value of mortgage approvals rose by 11.8% month-on-month and by 22.9% year-on-year.

In the third quarter of 2020, the value of mortgage drawdowns for property purchase decreased by 29.1% year-on-year to €1.58 billion.

FTB mortgage drawdown values decreased by 24.5% year-on-year to €1.03 billion, while the value of mover-purchase drawdowns decreased by 35.9% year-on-year to €526 million.

New properties

New properties (including self-builds) accounted for 37.6% of property purchase/build mortgages in Q3 2020, the highest share since Q2 2010.

Some 24.5% of the volume and 27.8% of the value of property purchase/build mortgages were FTB mortgages for new properties. This was the highest share by value recorded since the data series began in 2005.

The number of FTB mortgages on new properties fell by 18.5% year-on-year to 1,570 in Q3 2020 while the value of those mortgages fell by 13.1% to €442 million.

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Screenshot 2020-11-30 at 14.19.23 Source: BPFI

Speaking about the figures, Brian Hayes, chief executive of BPFI, said the increase in mortgage approvals “has largely been driven by first-time buyers who made up almost 60% of both the total volume and value of approvals as uncertainty around the economy due to Covid-19 has declined”.

Hayes added that even though mortgage approvals are down by 19% in volume terms, and 14% in value terms in the first 10 months of 2020 compared with the same period in 2019, next year looks set to see continued growth.

Hayes said the increase in approval numbers in October “represents a strong pipeline for drawdown activity as we move into 2021, which can help feed into an overall recovery in the economy in the year ahead”.

About the author:

Órla Ryan

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