Sharp increase in mortgage approvals last month

There was a sharp increase in both the volume and value of approved mortgages in May when compared with the same period last year, according to figures from the Banking and Payments Federation (BPFI).

The figures show there were 4,683 mortgage approvals, valued at €1.2 billion. Mortgage approval activity increased in volume terms by 149.2 per cent year on year and increased in value terms by 162.5 per cent over the same period.

The increase can be explained by a significant drop-off in mortgage activity last year while the State was in the grip of the Covid-19 crisis.

There were 3,814 residential purchase mortgage approvals, which was up 188.9 per cent, valued at €986 million in May. These approvals rose in volume terms by 188.9 per cent year on year and increased in value terms by 204 per cent over the same period.

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First-time buyer (FTB) mortgage approval volumes increased by 202.8 per cent year on year to 2,580, while mover purchase approval volumes increased by 162.3 per cent to 1,112.

Residential investment letting (RIL) mortgage approval volumes increased by 177.3 per cent to 122. Re-mortgage/switching mortgage approval volumes rose by 38.3 per cent to 585, while the number of top-up approvals rose by 108.8 per cent year on year to 284.

The value of FTB mortgage approvals increased by 220.7 per cent year on year to €643 million, while the value of mover purchase approvals increased by 175.4 per cent to €325 million.

RIL mortgage approval values increased by 212.2 per cent to €18 million. Re-mortgage/switching approval values rose by 34.7 per cent to €143 million while the value of top-up approvals rose by 174.3 per cent to €30 million.

There were 48,935 mortgage approvals in the year to the end of May 2021, valued at €12 billion.

Annualised mortgage approval activity to the end of May increased in volume terms by 6 per cent compared with the 12 months ending April 2021 and increased in value terms by 6.4 per cent.

Annualised purchase mortgage approval volumes rose by 6.6 per cent compared with the prior period to 40,098 in the 12 months ending May 2021, while the annualised value of purchase mortgage approvals was €1.2 billion, up by 7 per cent over the same period.

BPFI chief executive Brian Hayes said May had proven to be "yet another very strong month" for mortgage approvals activity, "especially for first-time-buyers".

“It is important we view these figures in the context of how the country was operating in May 2021 compared to 12 months earlier,” he said.

“While a number of Covid restrictions were lifted in May, lenders and customers had also adjusted much better to working within the restrictions and this is clearly borne out by the figures.”

Mr Hayes noted that in the 12 months ending May 2021, more loans were approved for home buyers/builders than in any 12-month period since the data series began in 2011 at 38,882.

“In value terms, approvals for home buyers/building neared €10 billion for the first time. These are significant figures and very much signal a robust pipeline for drawdown activity later in the year,” he said.