Mortgage approvals rise 14% in April with first-time buyer loans growing fastest

Mortgage approvals grew strongly last month with the volume of loans rising 14 per cent year-on-year, the latest banking industry figures show.

Almost two-thirds of approvals recorded in April were for first-time buyers, said the Banking & Payments Federation Ireland (BPFI).

A total of 4,446 mortgages were approved during the month. First-time buyers were approved for 2,828 mortgages, or about 64 per cent of the total, while mover-purchasers accounted for 20 per cent, or 898.

The number of mortgages approved rose by 17.7 per cent compared to March and was up 14 per cent on April 2023, the BPFI said.

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Mortgages approved in April were valued at €1.321 billion, of which first-time buyers accounted for €862 million, or 65.3 per cent, and mover-purchasers for €315 million, or 23.8 per cent.

Finally, there were 280 top-up loans during the month, up 15.2 per cent year-on-year. They were valued at a total of €42 million, up 32.5 per cent over the same period.

The value of mortgage approvals rose by 19.9 per cent month-on-month and by 18.4 per cent year-on-year. Within this, the value of first-time buyer approvals was up almost 23 per cent year-on-year, while the value of mover-purchaser approvals has climbed by a more modest 5.9 per cent.

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Remortgages and switching activity increased 30.7 per cent in volume terms year-on-year to 370 and by 23.9 per cent in value over the same period, to €90 million.

Residential investment letting mortgage approvals declined, however, falling 11.4 per cent year-on-year to 70 and dropping 5.6 per cent in value to €12 million.

The data is based on loans approved by members of the BPFI, the main industry body for the banking, payments and fintech industry.

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BPFI chief executive Brian Hayes said the latest figures pointed to strong growth in April for the volume and value of approvals. The share of approvals accounted for by first-time buyers was the second-highest since the BPFI began its data series in February 2011.

There were 30,776 first-time buyer approvals in the 12 months ending April 2024, he said, which was also the second-highest level since the data series started.

Over the 12 months to the end of April, there have been 49,473 mortgage approvals in the market, with the figures signalling “a particularly positive pipeline for first-time buyer mortgages”, Mr Hayes said.

The BPFI’s report was released amid wide expectations that the European Central Bank (ECB) will cut its key interest rates next month.

Christine Lagarde, the president of the ECB, told RTÉ earlier this week that there was a “strong likelihood” of a rate cut in the coming weeks if the data it receives reinforces its confidence that it will deliver its target inflation rate of 2 per cent in the medium term.

Meanwhile, the latest figures show that housing commencements, the strongest indicator of future supply, surged to almost 18,000 in April, a post-crash record. A Goodbody Stockbrokers analysis of the Building Control Management System indicated that 17,600 residential units commenced last month, bringing the total for the 12 months to April to more than 50,000. This also brought the total for the first four months of 2024 to 29,600 homes.

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