Home Purchasers Dominate Mortgage Market

  • 80% of new mortgage credit now going to home purchasers
  • First-time buyers consolidate position as largest market segment

The IBF/PwC Mortgage Market Profile published today shows that 7,261 new mortgages to the value of €1.24 billion were issued during the third quarter of 2010.

The overall market trend over recent times continues to be reflected in the volume of new lending which is down 7.2% on the previous quarter and 40.4% year on year.  However, within this overall trend, both the first-time buyers (FTBs) and mover purchaser segments are again seen to be the most resilient and to increase their share of the total market – albeit a smaller market.

The following are among the key features of the Q3 2010 data:

  • The key home purchaser segments of the market – FTBs and mover purchasers – together now account for 80% of the total value of mortgage draw downs and 67% of the market in volume terms.
  • FTBs have continued to increase their share of the overall market.  At 45.7%, they are the single largest segment by value as well as by volume (41.3%).
  • The residential investment letting, re-mortgage and top-up segments have all declined in value and in market share terms quarter on quarter.

Commenting on the data, IBF Chief Executive, Pat Farrell, stated:

“The figures for Q3 2010 show that new mortgage lending activity remains subdued.  However as has been the pattern over recent quarters, the increasing share of the overall market accounted for by home purchasers is notable.  The market is now predominantly supporting the process of home formation.

The IBF/PwC Mortgage Market Profile can be viewed on the IBF website here.

Note:  Irish Banking Federation (IBF) is the leading representative body for the banking and financial services sector in Ireland, representing over 70 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.

Further Information: Felix O’Regan, Head of PR and Public Affairs, IBF, tel. 6715311

IBF Statement on Final Report of the Expert Group on Mortgage Arrears and Personal Debt

The Irish Banking Federation (IBF) welcomes publication on the Dept. of Finance website of the Expert Group’s final report as reflecting the positive impact for borrowers of ongoing standard forbearance practices by the mainstream lenders and as providing the basis for additional customer support measures by way of advanced forbearance.

The IBF particularly welcomes the report’s acknowledgement that lender forbearance is working and is having a beneficial impact; and that the level of repossessions here remains substantially lower than that experienced in the UK.

As a participant in the work of the Expert Group, IBF was pleased to represent the views of the banking sector as part of the constructive deliberations to identify the nature and scale of mortgage arrears and the appropriateness of additional supportive measures.  IBF-member institutions have variously indicated their intention to voluntarily establish schemes that will reflect the principles of the Deferred Interest Scheme (DIS) proposed in the report and that will deliver on its overall objective. At the same time, the sector welcomes the Expert Group’s decision not to recommend a formal debt forgiveness scheme.

Banks remain fully committed to doing everything possible to help customers with genuine repayment difficulties and to working with Government and relevant agencies to ensure that both mortgage and personal debt are dealt with in a fair and sensible way.  This commitment is reflected in the Q3 2010 arrears data published today by The Central Bank.  This shows that, while the proportion of mortgages in arrears more than 90 days has increased from 4.6% to 5.1%, the number of actual repossessions continues to decline, from 86 to 81 – of which 22 were on foot of a court order and 59 were voluntarily surrendered/abandoned.  The number of repossessions has now fallen for the fourth successive quarter.

Note to Journalists: The Irish Banking Federation (IBF) is the leading representative body for the banking and financial services sector in Ireland, representing some 80 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.

IBF statement on corporate governance

The Irish Banking Federation (IBF) today stressed the importance to a sound financial services industry in Ireland of a strong corporate governance framework.  Responding to publication by the Central Bank of corporate governance requirements for credit institutions, the IBF committed itself and its members to working with the Bank in implementing the new requirements.

The IBF noted that elements of its submission as part of the consultation process had been taken on board.  The representative body welcomed the Central Bank’s decision to allow subsidiaries of international institutions operating here to appoint a Chairman drawn from their group executives.  This had been of particular concern to the Federation of International Banks in Ireland (FIBI) – an IBF affiliate which reflects the views of many of the world’s leading financial institutions – as this is critical to ensuring that IFSC-based businesses continue to be a well-positioned influencer within their  parent group to maximise group investment opportunities in Ireland.  IBF/FIBI had sought a regime which, while delivering high standards of corporate governance, strikes a balance that is proportionate in reflecting institutions’ size and systemic importance – and the requirements give recognition to this principle.

Finally, the IBF advises that it is important that adequate time is provided for the transition to the new regime as considerable work will be required to identify and process applications from suitably-qualified candidates for Director positions.

Note to Journalists

The Irish Banking Federation (IBF) is the leading representative body for the banking and financial services sector in Ireland, representing some 80 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.  As the representative voice for international banks in Ireland, the Federation of International Banks in Ireland (FIBI) is affiliated to IBF.