First-time buyer mortgage approvals reach new highs

First-time buyer mortgage approvals reached new highs in the year to the end of October despite a wider market slowdown, according to the latest figures from the Banking & Payments Federation Ireland (BPFI).

The total number of mortgages approved fell by 20.1 per cent year-on-year, while the value dropped by 16.9 per cent, with the trend driven mainly by lower switching levels, the industry body said.

Meanwhile, the average value of a first-time buyer mortgage reached €295,033 in October this year, up €27,000 on October 2022, reflecting higher house prices.

A total of 4,273 mortgages were approved in October 2023. First-time buyers were approved for 2,687 mortgages, or almost 63 per cent of the total, while mover-purchases accounted for 926 or almost 22 per cent.

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The number of mortgages approved rose by 2.7 per cent month-on-month and fell by 20.1 per cent compared with the same period last year.

Mortgages approved in October were valued at €1.2 billion, of which first-time buyers accounted for €793 million and mover-purchasers for €291 million. The value of mortgage approvals rose by 2.7 per cent month-on-month and fell by 16.9 per cent year-on-year.

Remortgage and switching activity fell by 78.3 per cent in volume terms year-on-year and by 81.5 per cent in value in the same period.

“Our latest figures show continued growth in mortgage approvals for first-time buyers, with the number of mortgage approvals for first-time buyers buying or building their own homes rising to a record level of 30,508 in the 12 months to the end of October, while the value of those approvals rose to more than €8.7 billion,” said Brian Hayes, BPFI chief executive.

Notwithstanding the overall slowdown in both the volume and value of mortgage activity, first-time buyer approvals “continue to defy the overall trend”, having grown in nine out of the first 10 months of 2023 – the only exception being February, he added.

“Looking ahead, while the pipeline for drawdowns remains solid to the end of 2023, continued supply of new and second-hand housing will be needed to meet robust demand in 2024.”