Lenders approve record number of mortgages for first-time buyers

A record number of first-time buyer mortgages were approved in the year to the end of July, according to the latest data from the Banking and Payments Federation Ireland.

Some 2,918 mortgages were approved for first-time buyers in the month, the industry body said. This brought the volume of first-time buyer mortgages to 29,754 for the year to the end of July, with a combined value of nearly €8.4 billion.

This represented a record annual high.

Of the 4,747 mortgages approved in July, 1,148 (24.2 per cent) were mover purchases.

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The number of mortgages approved fell by 0.4 per cent month-on-month, with a 9.7 per cent decline in approval rates when compared with July 2022.

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The value of mortgages approved for July was €1.36 billion, of which €837 million (61.7 per cent) was for first-time buyer mortgages. This value of mortgage approvals saw no change month-on-month but fell by 6.7 per cent year-on-year.

Mover purchasers’ mortgages were valued at €391 million (28.9 per cent), bringing the total to €3.9 billion for the 12 months to the end of July, the highest figure recorded since this data set began.

Ian Lawlor, managing director of Lotus Investment Group, said the growth in first-time buyer loans could be attributed to “the volume of new homes becoming available, particularly in the Greater Dublin Area and the commuter counties… [and] the first-home and help-to-buy schemes, which are enabling many more people to buy their first home that wouldn’t otherwise have been able to do so”.

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Commenting on the reports findings, Banking and Payments Federation Ireland’s chief economist Ali Ugur, said: “In addition to the more than 22,000 help-to-buy [scheme] applications reported by the Revenue Commissioners up to the end of July, the approval figures demonstrate that the pipeline for first-time-buyer mortgage drawdowns remains very strong.”

Mr Ugur added that the value of mover-purchaser approvals reached record highs, due to rising average mortgage values in general.

“The annualised value of mover-purchase approvals reached almost €3.9 billion in the 12 months ending July, the highest value since the series began. However, this in part reflects rising average mortgage values with the average mover-purchase approval exceeding €340,000 for the first time, at €340,957 in July 2023,” he said.