Mortgage Approvals – April 2018

 

Banking & Payments Federation Ireland (BPFI) has published the latest figures from the BPFI Mortgage Approvals Report for April 2018.*

The following are the key elements:

  • A total of 3,751 mortgages were approved in April 2018 – some 1,776 (47.3% of total volume) were for first-time buyers (FTBs) while mover purchasers accounted for 1,087 (29.0%).
  • The number of mortgages approved rose by 14.2% year-on-year and by 11.2% month-on-month.
  • Mortgages approved in April 2018 were valued at €842 million – of which FTBs accounted for €400 million (47.5%) and €281 million (33.4%) by mover purchasers.
  • The value of mortgage approvals rose by 19.8% year-on-year and by 10.4% month-on-month.

Re-mortgage/switching approvals rose on a year-on-year basis – by 103.5% in value and by 103.8% in volume terms.

The average home purchase approval in April 2018 was €237,732, up by 5.9% year-on-year. The average FTB approval was up by 7.7% year-on-year to €225,000, while the average mover purchase approval rose by 1.7% year-on-year to €258,533.

 

Data collection for the BPFI Mortgage Approvals Report began in September 2012 covering the period from January 2011 onwards in respect of the market’s main mortgage lenders. The BPFI Mortgage Approvals Report April 2018  as well as the time series data file is available on the BPFI website HERE

[*] The full time series of monthly data from January 2011 onwards is available on the BPFI website.

Note: Banking & Payments Federation Ireland represents banking and payments 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, Head of Communications, jillian.heffernan@bpfi.ie 087 9016880

BPFI Housing Market Monitor shows persistent lack of supply has resulted in potential buyers renting for longer

Banking & Payments Federation Ireland (BPFI) today published the BPFI Housing Market Monitor for Q1 2018. The monitor draws on a range of published data under the three key headings of housing supply, housing prices and rents and housing transactions for its assessment of the current state of the housing market.

In his commentary accompanying the report, BPFI’s Chief Economist, Dr Ali Uğur describes how the persistent lack of housing supply seems to be contributing to demographic changes within the population in Ireland leading to potential buyers renting for longer:

“A combination of Eurostat survey data and BPFI loan level data show that the gap between the average age of leaving the parental home and the average age of a first-time buyer (FTB) has increased from 5.6 years in 2008 to around 7.6 years in 2017.  During this period the average age of an FTB has increased from 31 in 2008 to 33.9 in 2017. In addition, we see that in 2004 nearly 60% of FTBs in Ireland were 30 years or younger, whereas in 2016 this proportion had declined to around 29%. During the same period, the share of FTBs accounting for borrowers between 31 and 40 has increased from 34% to 60%. A comparison with the UK shows that during the same period, the share of FTBs accounting for people 30 years or younger increased from 49% in 2008 to 54% in 2016.”

In his commentary Dr Ugur also looks at the most recent mortgage lending figures from BPFI which show both a value and volume increase in mortgage drawdowns in Q1 2018.

“BPFI data show that there were 7,879 mortgage drawdowns, valued at €1,704 million, in Q1 2018. Mortgage drawdown activity increased in volume terms by 13.5% year-on-year and increased in value terms by 22.4% over the same period. The average purchase mortgage drawdown in Q1 2018 increased by 7.9% year-on-year to €216,251. The average FTB drawdown was €216,458, up by 11.6% year-on-year, while the average mover-purchase drawdown rose by 5.4% year-on-year to €253,072.

Read the report here.

 

Note: Banking & Payments Federation Ireland (BPFI) is the voice of banking and payments 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, Head of Communications, 087 9016880

FIBI to host International Financial Services event in Brussels

The Federation of International Banks in Ireland (FIBI) is hosting on 26 June in Brussels an event entitled “International Financial Services in Ireland – Risks and Opportunities in a Changing World”.   Key note speeches on the day will be delivered by Michael D’Arcy TD, Minister of State for Financial Services and Insurance and John Berrigan, European Commission, plus a panel discussion chaired by Brian Hayes MEP. The event will offer insight into the changing world of financial services in Ireland and the dynamic international environment we are working in, while also discussing the changing regulatory and political landscape at a European level.

Equivalence Proposals

Irish MEP Brian Hayes has been tasked with drafting a non-legislative report on the issue of third country relationships, the first draft of which is available here. The report highlights perceived deficiencies of the equivalence process, the need for consideration of high-impact third countries in financial services agreements and notes the possibility of mutual access and mutual recognition in addition to raising the issue of delegation, something much discussed in relation to the review of the European Supervisory Authorities. Although non-legislative, the report is causing quite some controversy among MEPs on the Economic and Monetary Affairs Committee. MEPs are interpreting the text in various ways, and relating it to the Brexit discussions, which is not the purpose of the report. Despite the somewhat heated exchanges in Parliament, the report is non-legislative and therefore something that provides for a conversation alongside the Brexit negotiations, rather than any formal input.

 

BPFI to Host Sustainable Finance Forum

BPFI will hold a Sustainable Finance Forum on Wednesday 23 May to discuss the sector’s approach to the sustainable finance agenda and its ability to meet the challenges and opportunities ahead.

Laura Heuston, Sustainable Nation Ireland, will set the scene for the role of domestic and international banks based in Ireland. The forum will look at the key recommendations of the European Commission’s Action Plan on Sustainable Finance. The ambition and scale of the Commission’s plans mean that the legislative proposals to be announced in May will impact across the board in financial institutions, for example with regards to product design, private banking, project financing, lending to SMEs (climate risk), consumer credit (e.g. green supporting factor – mortgages and car loans), investment and non-financial disclosure. The forthcoming meeting will serve to determine initial key opportunities and challenges for the banking sector in Ireland in advance of discussions with authorities in Brussels and in Dublin.

 

Stakeholder Engagement

BPFI’s Chief Executive and our Chief Economist led a delegation of Significant Institutions in a meeting with Danièle Nouy, Chair of the ECB Supervisory Board, and with senior-level personnel from the Central Bank of Ireland.  An open engagement covered a range of important issues including a Single Supervisory Mechanism (SSM) update from Nouy, regulatory alignment post Brexit and the role of fintech/innovation hubs.

BPFI facilitated consideration of the Brexit process and implications by the BPFI/FIBI INED Forum.  Independent Non-Executive Directors (INEDs) from the international banks and domestic retail banks received a most interesting presentation from Matheson Managing Partner, Michael Jackson, which provoked a lively Q&A session and discussion.

BPFI’s Director Public Affairs attended the National Risk Assessment Seminar – Open Policy Discussion, organised by the Dept of An Taoiseach to inform preparation of Ireland’s national risk assessment.  Representatives from a wide range of stakeholders considered a range of geopolitical, economic, social, environmental and technological risks. Key among these were: cybersecurity- severity, diversity and pervasiveness of the risk; Brexit and trade war – impact on Ireland’s open economy; economic data – absence of consistent and reliable data to accurately measure our economic performance.

BPFI’s Head of Capital Markets and its Director Public Affairs joined stakeholders from the private and public sectors as well as research and academia in an Open Banking Symposium organised by Dublin City University’s Open Banking Research Consortium.  Against the backdrop of developments such as PSD2 and other open banking initiatives, the Consortium brings together the relevant stakeholders to collaborate in developing a shared understanding of what is expected by and of innovators in the marketplace.

FPAI host ‘Implications for Fintech’ Brexit event

The Fintech and Payments Association of Ireland (FPAI) hosted an evening meet-up, themed ‘Brexit – Implications for Fintech’ in May. The event attracted a high turnout and generated much discussion on the potential threats and opportunities that Brexit brings about for Irish Fintechs. Opening proceedings, Niamh O’Donnellan, Head of EU Affairs, BPFI, described the very latest developments in Europe, noting the rapidly diminishing timeframe for agreement on the terms of the Withdrawal Arrangement, citizens’ rights and the Irish border issue. Exacerbating matters are upcoming summer holidays and elections for the European Parliament.

Following Niamh, Brian Hanrahan of Sentenial and Fintan Byrne of CurrencyFair, described how they had built and developed Fintech businesses in the UK. Both agreed that in overall terms, doing business had been a positive experience, with a progressive can-do attitude to be found when dealing with regulators and other agencies. However, they felt Brexit would pose challenges not least the additional costs of managing new/diverging regulations and hiring and retaining staff from different jurisdictions.

Rounding out the panel, Ciara O’Grady of Deloitte, pointed to the positive prospects for Irish Fintechs from Brexit. With more UK-based Financial firms expected to re-locate to Ireland, there will be opportunity for Irish firms to provide services to such companies. She also suggested that Irish Fintechs seeking to expand to the UK should seek partnerships with existing, local companies, especially if they were already regulated by the FCA.

Moderator for the event, Michael Concannon, FPAI, conducted a ‘straw poll’ on general feelings towards Brexit – a small majority reckoning that Brexit, on balance, may provide more opportunity than threat, for Irish Fintech.

Concluding the event, Michael signalled that FPAI would be running a related event later in the year which would describe alternative markets for aspiring Fintechs, such as Hong Kong.

Stakeholders discuss Energy Efficient Mortgages Initiative

BPFI recently attended the Irish Green Buildings Council (IGBC) stakeholder meeting held to discuss the European Mortgage Federation’s (EMF) Energy Efficient Mortgages Initiative. IGBC invited a wide range of stakeholders, including representatives from Government Departments, the Sustainable Energy Authority of Ireland (SEAI), energy companies, BER assessors, utilities, mortgage lenders and BPFI, to examine the draft proposals developed through the project and to discuss opportunities to pilot the approach in Ireland. Marie-Louise Andersson of the EMF gave a detailed presentation on the initiative, providing considerably more detail on how this pan-European private banking financing mechanism would work.

Marion Jammet of IGBC outlined the current project and timelines and noted their position that non-mortgage lending for retrofitting purposes could be relevant also. Following the presentations, attendees divided into groups to walk through the process map and identify challenges and possible solutions. Further information can be found at http://energyefficientmortgages.eu/.