Mortgage arrears among main lenders fall in August

Mark Hilliard

Mortgage arrears among the six main lenders in Ireland have continued to fall, according to new figures released by the Department of Finance.

The statistics, which cover the month of August, show a 15 per decrease in accounts arrears among private dwelling homes (PDHs) compared to the same period last year.

The rate also dropped in the buy-to-let (BTL) sector where arrears were found to be 18 per cent down on 2015.

In a note, Investec said while the data is positive, the outstanding level of arrears "remains both high and problematic for Irish banks".

The Department figures only analyse the top six banks - AIB, Bank of Ireland, PTSB, ACC, KBC Ireland and Ulster Bank. They do not take into account other lenders or some restructured loans which together would increase overall numbers of troubled mortgages.

For the six lenders, PDH accounts in arrears stood at 64,415 by the end of August 2016. The number for BTLs was 21,119.

Total PDH mortgage accounts in arrears show a decline of almost 36 per cent from 100,132 in August 2014 to 64,415 at end August 2016, the Department said.

The number of mortgage accounts in arrears of greater than 90 days has declined by 38 per cent in the same period.

“[This] was evidenced in the tough treatment which the three listed domestic banks (AIB, BKIR, PTSB) received from their high outstanding stock of NPLs [none performing loans] in the recent EBA stress test exercise,” Investec said.

“We expect the rate of decrease of accounts in arrears to slow down as the Irish banks find cures for the more fixable elements of their NPL stocks and are left with a more hardened portfolio of unfixable mortgage accounts that will require lengthy, expensive and politically problematic foreclosure actions.”