Drop in the number of first-time buyers approved for mortgages

According to a recent report, FEWER first-time buyers were approved for a mortgage in November compared with the previous month.

New figures from the banks show that just short of 2,000 new buyers got the go-ahead from the banks to borrow money for a home.  Strong property price rises and Central Bank mortgage restrictions are combining to squeeze new buyers out of the housing market.

A shortage of properties to buy is also hampering new buyers.  The figures from the Banking and Payments Federation show that 1,942 buyers got approval for a mortgage in November.  This was 72 less than in October.

However, the November figure was more than the number approved for a mortgage in the same month in 2017.  Overall, a total of 4,102 mortgages were approved last November, with roughly half for first-time buyers.  Mover-purchasers accounted for around a third of those mortgages being approved, according to the banks.

The overall number of mortgages approved rose by 4.5pc in the month compared with November last year, but fell by 3.8pc month-on-month.  Mortgages approved in November were valued at €896m.

Re-mortgage/switching approvals rose on an annual basis.

Close to 600 homeowners got the all-clear to switch their mortgage in November, a rise of 33pc in volume compared with the same month in the previous year.

The Central Bank has changed its rules this month in a bid to make it easier for mortgage holders to switch lenders.

The changes are aimed at making it easier for consumers to obtain this information so that they are able to easily identify whether they are able to make savings by switching their mortgage, and make the process quicker and easier to complete if they do decide to switch, she said.

Mortgage switching in the market is very low, despite the huge savings that can be made.

The Central Bank wants to encourage switching.

Someone with a €250,000 mortgage paying a 4.3pc variable rate could save over €250 a month by switching to the cheapest rate. This works out at a saving of more than €3,000 a year.

There were 45,493 mortgage approvals in the 12 months ending November, valued at €10bn.

Director of public affairs at the Banking and Payments Federation Felix O’Regan said: “While the first-time buyer segment of the market shows a reduction in activity in November compared to the previous month, the picture is one of growth compared with the same period last year.”  He added that first-time buyers and mortgage switchers stand out in terms of year-on-year growth.

Irish Independent 9 January 2019

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