Banking industry reports 50% increase in mortgage approvals in July
Mortgages A In Approved Of Istock Were Total 3,397 Picture: July
The number of mortgages approved in July increased by over 50% compared to June according to latest figures from the Banking and Payments Federation Ireland (BPFI).
While there was a month-on-month increase the figures for July were down by 33.8% compared with July 2019. Over half of the number and value of approvals went to first-time buyers (FTB).
A total of 3,397 mortgages were approved in July — FTBs were approved for 1,883 mortgages (55% of total volume) while mover purchasers accounted for 750 (22%).
Mortgages approved in July 2020 were valued at €811m — of which FTBs accounted for €462m (57%), and mover purchasers for €196m (24%).
Dr Ali Ugur, Chief Economist, BPFI said that with the reopening of the economy, banks have seen a significant increase in mortgage approval numbers in July compared to the previous month.
"However on a year-on-year basis, approval numbers are still down which is not unexpected," she said.
"On the other hand, when we look at annualised mortgage approval activity, which is a better indicator of the trend, there were 40,090 mortgage approvals in the 12 months ending July 2020, valued at €9,238m. Annualised mortgage approval activity to end-July 2020 decreased in volume terms by 4.1% compared with the 12 months ending June 2020 and decreased in value terms by 3.7% over the same period."
The monthly report shows there were 2,713 purchase mortgage approvals (FTB, mover purchase, and residential investment letting), valued at €671m in July 2020. Purchase mortgage approval activity fell in volume terms by 35.8% year-on-year and decreased in value terms by 33.2% over the same period.
Mortgage approvals reached 3,733 in March before falling to 2,200 in April and then 1,879 in May as the impact of the Covid-19 restrictions took hold.
In response to the impact of Covid-19, retail banks in Ireland have provided over 70,000 mortgage payment breaks.