Year-on-Year Increase in New Mortgage Approvals Continues

  • House purchases continue to account for vast majority of new mortgage approvals

The latest figures from the IBF Mortgage Approvals Report, published by the Irish Banking Federation (IBF), show that 1,494 mortgages to the value of €252 million were approved in the three months ending February 2014.*

The following are the key elements:

  • A total of 1,494 mortgages were approved in February, of which 1,397 (93%) were for house purchase.
  • The number of mortgages approved showed a year-on-year increase of 32.6% and a month-on-month fall of 5.9%.
  • The value of mortgages approved in February was €252 million of which €243 million (96%) was for house purchase.
  • The value of mortgage approvals increased by 40.8% year-on-year and fell 8.7% month-on-month.

This graph presents the cumulative year to date trend in mortgage approvals up to February each year.

YTD Mortgage Approvals February 2014

The following graph presents the trend in approvals on a monthly basis since February 2012.

MoM Mortgage Approvals Feb 2014

Commenting on the figures, IBF Chief Executive, Noel Brett stated:

“February’s mortgage approvals figures have shown considerable growth on a year-on-year basis with the volume and value of approvals up over 32% and 40% respectively on the same period in 2013. And while we have seen a decline on a monthly basis, due to seasonality factors arising in the first quarter of each year, the all-important year on year trend is a positive indication that mortgage activity is strengthening and the market is growing – a trend we hope to see sustained in the months ahead. However, continued recovery and growth in the mortgage market will crucially depend on the acute shortage of suitable properties in key locations of demand being addressed.  While the Government has flagged its concern about this and its intention to address it, the publication of detailed measures is awaited”. 

Data collection for the IBF Mortgage Approvals Report began in August 2012 covering the period from January 2011 onwards in respect of the market’s main mortgage lenders. The report can be viewed on the IBF website here.

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*All figures are based on the three-month moving average.  Year-on-year compares the average for the three months ending February 2014 with the three months ending February 2013.  Month-on-month compares the average for the three months ending February 2014 with the three months ending January  2014.

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.

Contact: Jillian Heffernan Marketing Communications Manager, IBF, Ph: 01 4748835 / 087 9016880

Year ahead could mark turning point for SME sector if positive momentum can be sustained

  • Positive trends emerge in key SME indicators but challenges still remain

The DKM/IBF SME Market Monitor Q4 2013, published today by the Irish Banking Federation (IBF), indicates that the year ahead could well mark a turning point if the momentum of existing positive trends can be sustained.  However, challenges still remain for SMEs around domestic demand and retail sales.

The report highlights the positive performance seen across a number of indicators for SMEs including increased consumer sentiment, growth in employment, sustained performance in manufacturing and expansion in construction activity, all of which suggest that the economy is now entering a recovery phase. However, the report highlights that challenges still remain and that, in order to see a meaningful increase in SME activity, improvements will have to be seen in the all-important indicators of domestic demand, retail sales and disposable income, which have yet to display any real signs of sustained recovery.

Prepared by DKM Economic Consultants for IBF, the DKM/IBF SME Market Monitor looks at 15 published indicators which are important for the performance of Small and Medium-Sized (SME) businesses.  By looking at the totality of this data DKM assesses the future prospects for the Irish SME market as a whole.

Commenting on the key findings in today’s report, DKM’s Annette Hughes states:

“The latest review of indicators which monitors the environment for SMEs suggests that the economy is entering a recovery phase… The expectation is that 2014 will mark the turning point for SMEs as the positive developments seen to date gather momentum during the year… Recent and expected trends in 2014 should give rise to increasing optimism amongst SMEs. However, the environment remains challenging, a full recovery is still some way off and the key to SME performance will continue to be sustained increases in employment, disposable incomes and consumer spending.”

With recently published figures showing a fall in unemployment, Hughes explains that the continued growth in employment and investment expected throughout 2014 will benefit SMEs due to their dependence on the domestic economy. However, she cautions that there needs to be further sustained increases in domestic demand generally if there is to be a positive impact on the demand for SME goods and services.

The DKM/IBF SME Market Monitor can be viewed on the IBF website 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.

Contact: Annette Hughes, Director DKM Consultants, Ph01 6670372

Jillian Heffernan, Marketing Communications Manager, IBF, Ph: 01 4748835 / 087 9016880

IBF Statement on Mortgage Arrears

Today’s Central Bank figures show a welcome decrease in the mortgage accounts in arrears for greater than 90 days  – the first such decrease since the series began in September 2009. Taken together with the reduction in arrears seen in most other categories, the overall picture, in the main, presents a downward trend in the levels of arrears.

The number of principal dwelling house (PDH) and buy-to-let (buy-to-let) mortgage accounts in arrears is falling across all categories, with the exception of accounts in very long-term arrears of over 720 days.   It is recognised that this continues to pose a significant challenge.

It is notable that the proportion of PDH accounts in early stage arrears (up to 90 days) has declined by 20% since the peak in Q3 2012 to 5.2% of accounts, while the proportion of accounts in arrears greater than 90 days dropped below Q2 2013 levels to 12.6%.

The following graph presents the trend across all categories of PDH mortgages in arrears:

PHD Morgage in Arrears Q4 2013

Today’s figures also reflect a number of emerging trends in restructured arrangements which mark the evolution to longer-term, sustainable solutions on offer from lenders:

  • Almost four-fifths (79.3%) of the 84,053 restructured PDH accounts are meeting their repayment terms; some three-quarters (76.2%) of the 21,777 Buy-to-Let (BTL) restructures in place are meeting their repayment terms.
  • Growth is evident in a number of areas of restructuring including arrears capitalisation, term extension and split mortgage.
  • There were 28,364 new PDH restructures in Q4 2013, up 19% on Q3, and 6,731 new BTL restructures, up 25%.

Today’s Central Bank figures show a decline in the overall number of mortgage accounts in arrears reflecting the progress being made by IBF member banks in returning as many loans as possible to performing status and delivering sustainable solutions. Banks are continuing to work with their customers and the Central Bank with the aim sustaining this increase in the number of distressed borrowers being offered longer-term, sustainable resolutions. The continued rise in long-term arrears undoubtedly presents an ongoing challenge, and while today’s figures acknowledge that the pace of this increase is moderating, work remains to be done by borrowers and lenders alike in driving out longer term resolutions.

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Contact:

Jillian Heffernan, Marketing Communications Manager, ph: 01 474 8835 / 087 9016880

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