Mortgage Market Activity Shows Signs of Stability

  • 3,856 mortgages issued in Q4 2011, value of €639 million
  • First-time buyers make up almost half the market
  • Three successive quarters of growth

The IBF/PwC Mortgage Market Profile published today shows that 3,856 new mortgages to the value of €639 million were issued during the fourth quarter of 2011.  This brings to 14,273 the total number of new mortgages issued in 2011 to a value of €2.5 billion.

While the level of new lending in Q4 2011 is down some 31% by volume on the previous year, it is up almost 7% on the preceding quarter.  This latest quarter increase represents the third consecutive quarter of growth and is the first time since Q4 2005 that the number of new mortgages issued has increased in three successive quarters.

The key home purchaser segments of the market – first-time buyers and mover-purchasers – continue to dominate what is now a smaller market in terms of overall activity.  Together they now account for four-fifths of all new mortgages issued.  In effect, over 85% of all mortgage credit now goes to the home purchasing segments of the market.

Notably the average first time buyer’s loan now stands at an all-time low of just over €159,000.   This is reflective of falling house prices and increased affordability.

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

“Three successive quarters of growth provide the first tentative signs that the market may be stabilising.  However, it is still too early to view this as an indicator of recovery in the market, because Q4 is typically a strong quarter and Q1 is less so.  The fact remains that the economic environment remains very challenging.”

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

Note: The Irish Banking Federation (IBF) is the principal voice of 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, Director Public Affairs, IBF, tel. 671531, 087 6481644

Banks Continue to Proactively Assist Borrowers in Distress

The Irish Banking Federation (IBF) views today’s Central Bank statistics, which show 9.2% of all private residential mortgage accounts in arrears of more than 90 days, as reflecting the deteriorating economic situation for some borrowers.

While the vast majority of borrowers continue to meet their mortgage repayments, those borrowers facing difficulties are being assisted by their lenders based on direction and guidance from the Central Bank which focuses on determining the sustainability, on a case by case basis, of each individual mortgage.

Lenders are currently employing a range of measures to deal with distressed borrowers – as evidenced by the more than 74,000 restructured mortgages now in place.  Lenders also continue to examine what further initiatives can be introduced in the context of the Report of the Interdepartmental Group on Mortgage Arrears (Keane Report).

IBF and its members are in the process of carefully reviewing in considerable detail the Draft Personal Insolvency Scheme. The proposals represent a fundamental change in our law and in our legislative treatment of debt.  It is essential that such change is introduced in a balanced manner which seeks to treat insolvent debtors fairly whilst also recognising the position of creditors.

At the same time, IBF notes that the level of repossessions still remains comparatively low – 17 per 100,000 mortgages here compared to 76 per 100,000 in the UK.

IBF continues to strongly encourage borrowers who are under pressure with their repayments to communicate with their lenders in order to find a workable arrangement that will assist in the management of their financial difficulties.

Note: The 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.

IBF and Chambers Ireland Launch Finance Information and Advice Website for Small Business

www.smallbusinessfinance.ie is an open resource for small businesses of all backgrounds and at various stages of development on business planning and financial management

Minister of State for Small Business, John Perry T.D., today launched the Small Business Finance website, a joint initiative by the Irish Banking Federation (IBF) and Chambers Ireland, at an event in the National Gallery, Dublin.  Supported by additional content from sponsors Eversheds, Mazars and Energia, the Small Business Finance website is an open resource for small businesses of all backgrounds and at various stages of development on business planning and financial management.

Speaking at the event, Minister of State for Small Business, John Perry T.D, said:  “Ireland’s small business sector has thrived in the past and the Small Business Finance website is a sign of our innovative and enterprising ability for the future.  Having addressed the information gap between larger business or financial organisations and the small business sector previously it is highly encouraging to see some of Ireland’s most capable businesses work together to create such a valuable resource, not just for the small businessman, but for Ireland’s overall economy. I commend those who have put such hard work into it and look forward to witnessing the rewards”.

Minister John Perry TD launches Small Business Finance

IBF President, John Reynolds, said:  “A common theme on the issue of small business access to bank credit is that many small businesses are not sufficiently up to speed in business planning and financial management; and that the banking sector and other professional advisers could do more to assist them in that regard.  We see this new website as very much helping to bridge that information deficit.  Banks and businesses need one another.  A viable and vibrant small business sector is very much in our interests and we are committed to doing all we can to help make that happen.”

Chambers Ireland Chief Executive, Ian Talbot, said:  “We hope that this website will facilitate information awareness, promote knowledge and confidence in users and lead in turn to the creation of opportunities and jobs.”The website content has been developed by the Irish Banking Federation and Chambers Ireland, with contribution of material from sponsors on relevant areas of expertise.

Note to Editor:

This Small Business Finance website is one of a number of bank industry-wide initiatives in support of the bank/small business relationship.  These also include:

  • The creation of a standard small business credit application form/guidance which relates to the work of the Credit Review Office;
  • The development of a ‘Heads of Business Plan’ document in collaboration with the accounting profession, which will give rise to an agreed business plan template; and
  • Our working with the Minister and his officials in support of the forthcoming temporary, partial Credit Guarantee Scheme as well as the Microfinance Fund.