Government financial support will be key for SMEs bearing brunt of Covid-19 – BPFI SME Monitor

Domestic demand to decline by 15% in 2020 – similar to 2009-11

SMEs, especially hospitality, disproportionately affected

Two thirds of accommodation and food SMEs deferred or changed supplier, Revenue, or property-related payments

The latest BPFI SME Monitor warns that Covid-19 will have a significant negative impact on the Irish economy and especially on the SMEs that employ most of the country’s private sector workers.

The report notes that most of the economy shut down between mid-March and mid-May and more than 1.2 million people were receiving state support payments through the Pandemic Unemployment Payments of the Temporary Wage Support Scheme. Both gross domestic product and domestic demand, which is a better measure of activity in Ireland’s open economy, are expected to fall significantly in 2020, with the contraction in domestic demand estimated to be similar to that experienced in the 2009-2011 period.

Commenting on the impact on businesses, Dr. Ali Uğur, Chief Economist, BPFI noted the disproportionate effect of the pandemic on service-industry SMEs:

“Given that the labour-intensive services sectors such as retail, food and beverage, accommodation, tourism and travel are the most affected sectors due to the pandemic, this creates a disproportionate effect on SMEs, evident in the number of business closures, reduced turnover, falling profits and most of all in terms of the numbers of unemployed. Revenue Commissioners data shows that at the end of June 2020, nearly 99% of employers utilising the TWSS were SMEs and 76% of employees on the scheme worked for SMEs.”

While recovery began with the easing of restrictions and reopening of most retail outlets during June, many SMEs still faced significant cash flow issues and Dr Uğur highlighted the importance of government financial supports:

“Given the significant drop in both turnover and income, SMEs seem to have taken a range of measures to manage their cash flows and reduce their costs. In a recent CSO survey, some two-thirds of the responding SMEs in the accommodation and food services sector indicated that they took measures such as deferred or changed payment to suppliers, the Revenue Commissioners or property related expenses.”

“The Irish government has also launched various schemes to support businesses affected by Covid-19…The biggest in potential scale is the yet-to-be launched €2 billion Covid-19 credit guarantee scheme through which the government plans to provide an 80% guarantee against bank losses on qualifying loans to eligible SMEs…Given continued uncertainty around the future outlook due to the pandemic and changing public health measures, it is likely that this scheme will be an important part of the supports provided to SMEs particularly in the third quarter of 2020.”

The BPFI SME Monitor is available on the BPFI website here.

 

Notes: Banking & Payments Federation Ireland (BPFI) represents the banking, payments and fintech sector in Ireland.  Together with its affiliates, the Federation of International Banks in Ireland and the Fintech & Payments Association of Ireland, BPFI has some 100 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.

 Contact: Russell Bryce, Head of Public Policy Engagement and Research, 0851019444 or russell.bryce@bpfi.ie

Contactless spending hits new high of almost €1.9 billion in Q2 2020

More than €63m worth of contactless per day in Q2 2020

The latest figures from Banking & Payments Federation Ireland (BPFI) show that the value of contactless payments reached a new high of almost €1.9 billion in Q2 2020, some 26.6 % higher than in Q2 2019. Spending grew despite volumes dipping to 123 million, the lowest level since Q1 2019, and 1% lower than a year earlier.

Consumers increased their use of contactless payments as cash usage fell and with the contactless limit increasing to €50 during April in response to the COVID-19 crisis, the average payment value jumped from €12.51 in March to €15.57 in June.

Daily contactless spend reached a new monthly high of €27.7 million in June, having dropped as low as €15.7 million in April.

Speaking on the latest figures, Brian Hayes, BPFI Chief Executive said: “Now more than ever consumers want fast, simple and secure payments and this is reflected in today’s figures which show strong Q2 growth in the value of contactless payments. It is likely this growth is in part a result of the increase in the contactless limit to €50, a significant undertaking at the time by BPFI members who worked hard deliver this in collaboration with a number of parties.”

“The increase in contactless payments reflects a wider recovery in the economy, and in the retail and hospitality sectors in particular. We would expect contactless payments to continue to grow in the months ahead in line with consumer spending.”

Contact: Russell Bryce, Head of Public Policy Engagement and Research, 0851019444 or russell.bryce@bpfi.ie

Notes: Banking & Payments Federation Ireland (BPFI) represents the banking, payments and fintech sector in Ireland. Together with its affiliates, the Federation of International Banks in Ireland, and the Fintech & Payments Association of Ireland, BPFI has some 100 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.

Source: BPFI. Data is collected from AIB, Avantcard, Bank of Ireland, KBC Bank Ireland, permanent tsb and Ulster Bank. It includes payments by card and mobile wallet such as Apple Pay or Google Pay

Latest BPFI figures show unsurprising reduction in mortgage drawdowns in Q2 2020, however mortgage approvals show monthly rise

Future trends difficult to predict with normal seasonal trends disrupted by Covid-19

 30th July 2020 – Banking & Payments Federation Ireland (BPFI) has today published the latest figures from the BPFI Mortgage Drawdowns Report for Q2 2020 and BPFI Mortgage Approvals Report for June 2020.

The following are the key figures from the Mortgage Drawdowns Report for Q2 2020:

  • 6,622 new mortgages to the value of €1,462 million were drawn down by borrowers during the second quarter of 2020.
  • This represents a fall of 34.8% in volume and 35% in value on the corresponding second quarter of 2019.
  • A comparison with the previous quarter (Q1 2020) shows a fall of 24.1% in volume and 26.7% in value.
  • First-time buyers (FTBs) remained the single largest segment by volume (49.6%) and by value (50.3%).

In addition, BPFI also published today the latest figures from the BPFI Mortgage Approvals Report for June 2020. The following are the key elements:

  • A total of 2,263 mortgages were approved in June 2020 – some 1,059 were for FTBs (46.8%) of total volume) while mover purchasers accounted for 557 (24.6%).
  • The number of mortgages approved in June rose by 20.4% month-on-month but fell by 49.5% compared with the same period last year.
  • Mortgages approved in June 2020 were valued at €536 million – of which FTBs accounted for €253 million (47.2%) and €149 million by mover purchasers (27.8%).
  • The value of mortgage approvals rose by 21.3% month-on-month but fell by 48% year-on-year.

Speaking on the publication of the data, Brian Hayes, Chief Executive, BPFI said: “This latest set of figures shows that mortgage drawdowns have held up relatively well in the second quarter of this year despite the overall downward trend and scale of disruption to the economy. In the current volatile environment, we do not expect the market to follow the normal seasonal patterns so the rest of the year will be difficult to predict. However, it is likely we may see a bigger Covid-19 impact in our next set of quarterly drawdown figures due to the time lag between mortgage applications, approvals and drawdowns”.

“Looking at the approvals figures for June, while the year-on-year figure was well down, almost 50% on this time last year, activity in June did see a 20% increase on May. The increase indicates a level of resilience and robustness in the market which has been bolstered by the removal of some Covid-19 restrictions since mid-May. However, any indications of a recovery need to be treated with caution as it is early days in the economic journey.

“Overall, our message is that lenders are continuing to approve new mortgage applications and consumers should actively proceed with mortgage applications where their incomes and employment circumstances have not been impacted by the current pandemic and where they meet the normal lending criteria ”, said Mr. Hayes.

The BPFI Mortgage Drawdowns and Mortgage Approvals reports can be viewed on the BPFI website here.

Note: Banking & Payments Federation Ireland (BPFI) represents the banking, payments and fintech sector in Ireland.  Together with its affiliates, the Federation of International Banks in Ireland and the Fintech & Payments Association of Ireland, BPFI has 100 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

Sharp decline in cheque usage with 45% falloff since 2016 as consumers adopt electronic payments

Some 6.6 million cheque payments in Q1 2020, down 15% on same period last year and down 45% since 2016

The latest figures from Banking & Payments Federation Ireland (BPFI) show that cheque usage continued to decline in Q1 2020 with only 6.6 million cheque payments, down from 7.8 million (-15%) in Q1 2019 and 12 million (-45%)in the first quarter of 2016[1].

Cheque usage has declined in recent years as both business and consumers move to electronic payments. Consumers, in particular, rely heavily on cards to pay for their shopping both online and in the store, while they mainly use direct debits to pay their regular bills such as electricity, TV or phone.

A recent consumer survey commissioned by BPFI[2] showed that only 2% of consumers prefer to pay a bill or a friend by cheque while only 4% prefer to donate to charity by cheque.

Ireland is now one of only a handful of countries worldwide where cheques are still regularly used, including Canada, Cyprus, France, Portugal, Singapore, the UK and the US, based on figures from the European Central Bank and the Bank for International Settlements. Both Ireland and the UK have seen substantial falls in cheque usage in the past decade, with Irish cheque usage per capita down from 22.1 in 2009 to 6.4 in 2019.

Sources: BPFI, UK Finance, CSO, ONS

 

Speaking about today’s figures, Gill Murphy, Head of Payment Schemes, BPFI said: “Given the fast-changing nature of consumer preferences away from cheques and towards electronic transfers, cards and mobile banking, today’s figures are not a surprise. This continued drop in cheque usage by consumers is a trend we expect to see continue as consumers and businesses are provided with more choice and convenience regarding payment methods. At the same time however 6.6 million cheque payments this quarter is not insignificant and demonstrates that some consumers and smaller businesses in particular are still in no rush to shred their chequebooks just yet, the challenge for us is to try to ensure that there is a full awareness of what the alternative options are and the potential benefits of those options for both consumers and businesses.”

 

Contact: Jillian Heffernan, Head of Communications, 087 9016880 or jillian.heffernan@bpfi.ie

Notes: Banking & Payments Federation Ireland (BPFI) represents the banking, payments and fintech sector in Ireland.  Together with its affiliates, the Federation of International Banks in Ireland, and the Fintech & Payments Association of Ireland, BPFI has some 100 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.

[1] BPFI’s current quarterly data series on cheques starts in Q1 2016

[2] Banking & Payments Federation Ireland: Consumer Payments Research Report May 2020

BPFI statement on payment breaks and accrued interest

Ireland one of only 10 EU Member States to offer payment breaks to mortgage customers

In a comprehensive statement issued today by Banking & Payments Federation (BPFI), BPFI Chief Executive Brian Hayes has stated “The Irish payment break moratoria including the accrual of interest is, always has been and remains fully in line with EBA Guidance.”

He said the compliance of the Irish moratoria has been confirmed by the Central Bank of Ireland (CBI) to the European Banking Authority, to the Oireachtas Committee and in a letter to the CEOs of all lenders published on 8 June*. “BPFI, together with industry have worked closely with the Central Bank of Ireland on the Payment Break and will continue to do so.”

Mr. Hayes today stressed that the industry Payment Break in Ireland remains as originally and consistently communicated to customers, in good faith, from the outset of the Covid-19 Payment Break announcement in mid-March.

Consistency and transparency with customers

Mr. Hayes said the industry wide payment breaks is one of the most wide-ranging private sector moratoria made available in Europe in terms of the scope of products included and its availability to all customers impacted by COVID 19. “Irish lenders moved rapidly in March to make the Payment Break available to any customer impacted by COVID 19 and adhered to long-established precedents on payment breaks and interest, precedents which were reinforced through EBA COVID 19 specific guidance on 2 April. Lenders have been consistent, transparent and upfront regarding the costs associated with such a break and this approach is in line with CBI supervisory expectations published on 8 June 2020”, he added.

Mr Hayes said: “The Payment Break is offered on the same conditions as Payment Breaks in the past, and we believe that it is important that we have fairness of treatment across the board for past, present and future customers  wishing to avail of breaks.”

Ireland in line with Europe

Mr. Hayes said the approach by Irish lenders goes above and beyond the offering made in other European countries. According to the EBA, only 10 Member States offer moratorium to mortgage customers, of which Ireland is one. Moreover, the accrual of interest during the Payment Break is in line with other countries in Europe whose private banks have introduced payment breaks.

The BPFI CEO said:” There are two exceptions, Belgium, and Spain, where for a very specific, limited and legally defined cohort of customers interest does not accrue. Nonetheless, there are specific conditions attached to such concessions for those limited cohort of customers, while for other customers in those countries interest does actually accrue.”

Mr Hayes said: “Ireland was one of the first countries in Europe to offer payment breaks to customers unlike some major countries in Europe. The initiative is available for any customer impacted by COVID 19, including those that may be in arrears and applies to Personal, SME and Mortgage customers.

Mr Hayes refuted false allegations that the industry deliberately misinformed the Taoiseach during a meeting on 11 May on the accrued interest issue. He said that Irish lenders have been clear and upfront in outlining the type of payment breaks available to customers and how they would apply in line with EBA Guidance published on April 2nd.

Mr Hayes also rejected any claim that banks are profiteering from Covid-19 Payment Breaks. He said: “Retail banks in Ireland have already provided an extra €0.5 billion for future losses in their Q1 2020 updates. Retail banks in Ireland have provided more than 140,000 payment breaks for loans across various customer categories with mortgages accounting for 70,000 of these breaks comprising mortgage breaks. There is an acceptance that many people may not be able to meet their repayments in the months ahead and that there will be considerable losses to the banks”.

BPFI and its Members understand that some customers may experience financial difficulties and distress even when the Government Measures are lifted.,customers will remain the priority of the lenders, as has been the case from the very outset of the Payment Break offering in Mid-March.

We appreciate that many customers are under pressure and financial stress and where a customer requires, banks will work with customers on appropriate solutions in line with a customer’s individual circumstances when the payment break period ends.

ENDS/

*CBI Dear CEO Letter, 8 June 2020

Note: Banking & Payments Federation Ireland (BPFI) represents the banking, payments and fintech sector in Ireland.  Together with its affiliates, the Federation of International Banks in Ireland and the Fintech & Payments Association of Ireland, BPFI has 100 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

Mortgage approvals down in May

Almost 1,900 mortgages worth €442 million approved despite severe restrictions and economic uncertainty

Banking & Payments Federation Ireland (BPFI) has today published the latest figures from the BPFI Mortgage Approvals Report for May 2020. The following are the key elements:

  • A total of 1,879 mortgages were approved in May 2020 – some 852 were for FTBs (45% of total volume) while mover purchasers accounted for 424 (23%).
  • The number of mortgages approved fell by 14.6% month-on-month and fell by 61.9% compared with the same period last year.
  • Mortgages approved in May 2020 were valued at €442 million – of which FTBs accounted for €200 million (45%) and €118 million by mover purchasers (27%).
  • The value of mortgage approvals fell by 15.9% month-on-month fell by 61.1% year-on-year.

Speaking on the publication of the data, Brian Hayes, Chief Executive, BPFI said: “As expected we have seen a further fall off in mortgage approvals figures during May, down just over 14% in volume terms on April. This is not unexpected given the scale of the lockdown and physical restrictions, and their impact on employment figures and economic uncertainty. Similarly, the 60% fall in the volume of approvals when compared to May 2019 is not surprising given the scale of the pandemic and its immediate impact on incomes and business activity.

“However, even under the most severe restrictions when the majority of the country was still shut down and during what has been an unprecedented shock to both the Irish and global economy, it is significant that almost 1,900 mortgages valued at €442 million were approved here during the month of May. This shows that the demand within the housing market may be more resilient than expected and also demonstrates that banks are meeting this demand and continuing to approve new applications despite the challenges in the current environment.”

“Our strong message to would-be borrowers, whose income and employment circumstances have not been impacted by the current pandemic and who meet normal lending criteria, is to actively proceed with their applications,” said Mr. Hayes.

The BPFI Mortgage Approval Reports May 2020 can be viewed on the BPFI website here.

 

Note: Banking & Payments Federation Ireland (BPFI) represents the banking, payments and fintech sector in Ireland.  Together with its affiliates, the Federation of International Banks in Ireland and the Fintech & Payments Association of Ireland, BPFI has 100 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

Strong recovery in contactless payments as spending hits €600 million in May – highest monthly total in 2020

More than €19m worth of contactless per day in May

The latest figures from Banking & Payments Federation Ireland (BPFI) show a strong recovery in the value of contactless payments in May as spending reached almost €600 million, the highest monthly total to date.

On average consumers made €19.3 million worth of contactless payments per day during May up 7% on figures in February before COVID-19 hit. In volume terms contactless payment usage was 1.25 million, down from 1.51 million ‘taps’ per day in February.  While this is unexpected due to the lockdown and restrictions on movement during March through to mid-May, overall the figures indicate  that consumers are spending more than before through contactless payments with the May figures accounting for the highest value on record this year.

With the contactless limit increased to €50 during April in response to the COVID-19 crisis, the figures also show an increase in the average contactless transaction which reached €15.30 in May, up from €11.92 in February.

Speaking on the latest figures, Brian Hayes, Chief Executive BPFI said: “Now more than ever before consumers want fast, simple and secure payments and this is very much reflected in today’s figures which are showing a strong recovery in the values of contactless payments for May. It is likely this growth is in part a result of the increase in the contactless limit to €50, a significant undertaking at the time by BPFI members who worked hard deliver this in collaboration with a number of parties.”

“The volume of contactless payments were down in May when compared to February before COVID-19 hit, however this must be seen in the context of the restrictions which only started to ease during the second half of May. With the recent acceleration of the reopening roadmap and the resulting uplift which has been seen in retail and hospitality spending in particular, we would expect that contactless volumes should show a recovery in the months ahead as more restrictions are lifted.  This is further supported by research carried out by BPFI recently which shows that 92% of all adults have now used contactless payments with one third of adult using contactless as their preferred method of payment in cafes and over a quarter preferring contactless when grocery shopping.”

 

Contact: Jillian Heffernan, Head of Communications, 087 9016880 or jillian.heffernan@bpfi.ie

Notes: Banking & Payments Federation Ireland (BPFI) represents the banking, payments and fintech sector in Ireland.  Together with its affiliates, the Federation of International Banks in Ireland, and the Fintech & Payments Association of Ireland, BPFI has some 100 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.

Banking industry confirms new 30 September deadline date for new payment break applications

Mortgage payment break applications now just 3% of what they were at the peak of Covid-19

Banking & Payments Federation Ireland (BPFI) Chief Executive Brian Hayes has welcomed the announcement by the EBA to extend the deadline date for new payment break applications to 30th September, however he said he expected the demand for such breaks to taper in the weeks ahead given the rapid fall in applications already seen by the industry in recent weeks following the lifting of Covid-19 restrictions and its impact on the economy and employment.

Mr. Hayes said: “The Payment Break offered by lenders has been a hugely significant measure throughout the Covid-19 crisis, a factor acknowledged by the EBA in their statement from Paris this morning. Our Members’ customer engagement teams stand ready to support their customers at this time.”

Commenting on the falling demand for mortgage payment breaks Mr. Hayes said: “Figures from across the sector this week indicate that demand for mortgage payment breaks is now just 3% of what it was at the peak of Covid-19, indicating a strong fall off in the demand for these breaks.”

“Our Members were receiving thousands of applications a day in the early stages of Covid-19 in March and April; however, we are seeing a significant reduction in demand, falling to just 30 applications a day in the case of some Members. The fall in demand is not unexpected given the gradual re-opening of the economy and the return to work amongst employees. Already we have seen a recent reduction of 100,000 or 17% decline in the number of employees receiving the pandemic unemployment payment (PUP) in a short period and the continued re-opening of sectors that had been most severely hit in the early stages of the Covid-19 pandemic”.

Mr Hayes encouraged those seeking advice or making a decision on an application to access the BPFI’s Comprehensive Guide to the COVID-19 Payment Break & Repayments at the BPFI website.

 

Contact: Jillian Heffernan, Head of Communications, 087 9016880 or jillian.heffernan@bpfi.ie

Notes: Banking & Payments Federation Ireland (BPFI) represents the banking, payments and fintech sector in Ireland.  Together with its affiliates, the Federation of International Banks in Ireland, and the Fintech & Payments Association of Ireland, BPFI has some 100 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.

Severe impact to housing supply this year due to COVID-19, but demand may be more resilient amongst borrowers on typical home buyer incomes

  • First time buyers on incomes less than €50,000 accounted for just 17% of FTB drawdowns (2019)

  • Earners over €50,000 per annum account for just 14% of PUP payment recipients

The latest Housing Market Monitor Q1 2020 published today by Banking & Payments Federation Ireland (BPFI) shows that, restrictions imposed to halt the spread of Covid-19 will have a huge impact on housing supply this year however, demand may be more resilient amongst borrowers on typical home buyer incomes.

Providing his analysis of supply and demand in the housing market post-COVID, Dr Ali Ugur, Chief Economist, BPFI said: “Ireland’s housing supply is going to take a significant hit this year given that the construction sector stopped all activity between the end of March and mid-May as well as the fact that current activity is very much limited due to work practice restrictions as part of Covid-19 health measures.   Estimates before the current crisis for total housing completions in 2020 were between 24,000 to 26,000 units. Assuming that the sector could operate at 50% to 75% capacity for the rest of the year, we estimate total completions would be around 14,000 to 16,500 units in 2020 leaving a gap of between 10,000 and 12,000 units in total this year.”

“However, on the demand side, we feel this may hold up better due to the important role which income levels play in housing and mortgage demand. Looking at those in receipt of either the Pandemic Unemployment Payment (PUP) or the Temporary Wage Subsidy Scheme (TWSS) we can see that those in the highest income brackets have been impacted the least. Workers with average gross earnings of more than €950 weekly or about €50,000 per annum account for just 14% of those receiving the PUP payment and 21% of those participating in the TWSS scheme. Looking at these figures in the context of the mortgage market, it is earners in this same income bracket that account for the majority of those drawing down mortgages.”

Source: BPFI analysis based on data from the CSO, Revenue Commissioners and the Department of Employment and Social Protection. Note: Excludes Primary industries

 

Dr Ugur explained: “We know from previous analysis that First Time Buyers (FTBs) with incomes of less than €50,000 accounted for just 17% of the FTB drawdowns whereas customers with incomes less than €50,000 only accounted for 7% of the total drawdowns amongst mover purchasers in 2019. Given the significant and increasing share of FTBs in the Irish mortgage market, and income levels required to secure a mortgage, income losses during the pandemic may not have a significant effect on demand for mortgages from this cohort.”

“To summarise, while it is clear that the supply of new homes in 2020 will be less than what was estimated before the pandemic, it is also likely that demand for homes and mortgages may be lower than estimated due to uncertainty in the housing market and diminished consumer confidence. However, reduced demand due to lost or lower income levels is likely to depend on the pace of the wider economic recovery in 2020. Hence as both supply of, and demand for, housing will be impacted negatively due to COVID-19, it is likely that changes in average prices will reflect supply and demand imbalances in the short term.”

BPFI’s Housing Market Monitor draws on BPFI data as well as a range of other published research for its assessment of the current state of the housing market. The latest report for Q1 2020 can be found on the BPFI website here.

 

Notes: Banking & Payments Federation Ireland (BPFI) represents the banking, payments and fintech sector in Ireland.  Together with its affiliates, the Federation of International Banks in Ireland, and the Fintech & Payments Association of Ireland, BPFI has some 100 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.

The BPFI Housing Marking Monitor is published quarterly. In addition to presenting a unique range of loan-level data, the Monitor draws on a range of published data under the three key headings of housing supply, housing prices and rents, and housing transactions in its assessment of the current state of the housing market.

Contact: Jillian Heffernan, Head of Communications, 087 9016880 or jillian.heffernan@bpfi.ie

Mortgage approvals down over 40% in April as impact of COVID-19 takes effect

Lenders continue to approve new mortgages with 2,200 mortgages to the value of €525m approved in April

Banking & Payments Federation Ireland (BPFI) has today published the latest figures from the BPFI Mortgage Approvals Report for April 2020. The following are the key elements:

  • A total of 2,200 mortgages were approved in April 2020 – some 1,034 were for FTBs (47% of total volume) while mover purchasers accounted for 528 (24%).
  • The number of mortgages approved fell by 41.1% month-on-month and fell by 46.5% compared with the same period last year.
  • Mortgages approved in April 2020 were valued at €525 million – of which FTBs accounted for €256 million (48.8%) and €135 million by mover purchasers (25.7%).
  • The value of mortgage approvals fell by 40.3% month-on-month fell by 43.6% year-on-year.

Speaking on the publication of the data, Brian Hayes, Chief Executive, BPFI said: “As expected we have seen a significant drop off in activity in the mortgage market in April as the medium term impact of COVID-19 takes effect. And in the current conditions it is likely that we will see a similar fall in mortgage drawdowns for this quarter as they follow the downward trend shown in today figures.

The BPFI CEO said: “Looking ahead there is no doubt that the period ahead will remain challenging for the mortgage market and the housing market as a whole as the current economic uncertainty continues. And during this period it will be necessary for both lenders and borrowers to take a realistic and pragmatic approach given the change in individuals’ financial and employment circumstances. This is ultimately in the best interest of the customer and to ensure that borrowers can afford the loans they take out.”

“However, it is equally important to note today that despite the challenges during these unprecedented times, both economically and due to physical restrictions, 2,200 mortgages to the value of €525 million were approved by lenders here during April. This highlights the fact that lenders are continuing to approve new applications and that would-be borrowers should actively proceed with mortgage applications where income and employment circumstances have not been impacted by the current pandemic and where they meet the normal lending criteria ”, said Mr. Hayes.

“If customers have any questions in relation to the impact of COVID on their mortgage application we would encourage them to talk to their lender or go to the BPFI website where they will find a detailed COVID-19 FAQ guide on mortgages which is available here”, concluded Mr. Hayes.

The BPFI Mortgage Approval Reports April 2020 can be viewed on the BPFI website here.

 

Note: Banking & Payments Federation Ireland (BPFI) represents the banking, payments and fintech sector in Ireland.  Together with its affiliates, the Federation of International Banks in Ireland and the Fintech & Payments Association of Ireland, BPFI has 100 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