According to the Banking & Payments Federation Ireland (BPFI), remortgaging and mortgage switching activity experienced a significant year-on-year drop of 54.4% in March. This decline was due to a slowdown in the market caused by rising interest rates. In addition to this, the value of remortgage and switching activity also fell by 53.1% compared to March 2022. Despite the drop, the BPFI’s CEO, Brian Hayes, stated that demand for new mortgages remains high, with 10,908 new mortgages worth €2.9 billion drawn down by borrowers in Q1 2023. However, overall, there has been a continued year-on-year slowdown as the impetus from switching decreases.
In March, mortgage approval volumes fell by 1.2% year-on-year but were up 33.8% compared to February. The BPFI loan approval data shows that 4,520 mortgages were approved in March, with 62% of these being for first-time buyers – the highest share for first-time buyers since the data was first published in July 2014. Mortgages approved in March 2023 were valued at €1.3 billion, of which first-time buyers accounted for €819 million and mover-purchasers for €332 million.
Separate mortgage drawdown figures demonstrate that new borrowing increased by 10.1% in volume and 14.1% in value in Q1 compared to the same period last year. Approximately, 10,908 new mortgages, worth €2.87 billion, were drawn down in the first three months of 2023, down 31.1% in volume and 34.1% in value compared to the fourth quarter of 2022. First-time buyers were the single largest segment of the mortgage market, accounting for 50.8% by volume and 51.1% by value.
Remortgage and switching saw a year-on-year increase of 22.5% by volume and 25.3% by value. However, they fell 52.1% and 53.7%, respectively, on the previous quarter. Despite this, Mr Hayes said that the homebuyer segments of the market are still positive, with first-time buyer and mover-purchaser drawdown volumes reaching their highest first-quarter levels since 2007 and 2008, respectively. Lending values continue to grow, driven by higher housing prices. At more than €292,000, the average first-time buyer approval in March was the highest since detailed approval data became available in July 2014.
