Mortgage approvals up almost 10% year-on-year in November

Loans worth almost €1.5 billion approved in single month but much activity driven by mortgage switching

Mortgage approvals in November were almost 10 per cent higher than they were in the same month a year earlier, figures from the Banking and Payments Federation Ireland (BPFI) show.

Its latest report shows lenders approved mortgages worth almost €1.5 billion in November, with a total of 5,433 loans approved during the month. This was up 9.6 per cent compared to November 2021 and 1.6 per cent higher than in October 2022.

In the 11 months to the end of November 2022, almost 55,000 mortgages with a value of €14.9 billion were approved. This is the highest level since the BPFI’s data series began in 2011, with the growth largely driven by higher mortgage switching activity as the European Central Bank (ECB) made a series of interest rate rises.

“Our latest mortgage figures show that in November 2022 approvals activity increased both in value and volume terms, however it should be noted that much of this was driven by switching,” said BPFI chief executive Brian Hayes.


First-time buyers

While first-time buyers remain the largest segment in the mortgage market with approvals valued at some €7.1 billion in the year to November, increased switching activity is largely driving the rate of growth, with volumes up by 73 per cent year-on-year to more than 16,000, as customers continue to seek out new deals to minimise the impact of ECB interest rate decisions,” he added

Of the 5,433 mortgages approved in November 2022, first-time buyers accounted for 2,533 of them or almost 47 per cent of the total, with these loans having a value of €699 million. Mover-purchasers accounted for 1,148 mortgages or 21.1 per cent of the total volume, with their mortgages amounting to €359 million or 24 per cent of the value.

The value of mortgage approvals rose by 2.5 per cent month-on-month and by 16.8 per cent year-on-year, the BPFI said.

Switching and top-ups

Non-purchase mortgage activity, which includes switching and top-ups, grew by 64.4 per cent year on year in volume terms to 1,647 and by 93.3 per cent year on year to €425 million.

Mr Hayes added that the BPFI expected to see the “healthy pipeline” in approvals reflected in “strong drawdown figures”, especially in value terms, in the fourth quarter of 2022.

The ECB increased its key lending rate four times last year in order to combat the soaring rate of inflation, taking it from 0 per cent to 2.5 per cent. Further rate hikes are expected this year, with Finnish central bank chief Olli Rehn commenting on Wednesday that the ECB would have to raise rates “significantly” over its coming months to dampen inflation.

However, there are tentative signs that the worst of soaring prices is over. Eurostat said last week that the overall euro zone annual inflation figure is expected to have dropped to 9.2 per cent in December, down from 10.1 per cent in November, with a fall in energy prices driving the slowdown.

Laura Slattery

Laura Slattery

Laura Slattery is an Irish Times journalist writing about media, advertising and other business topics