Surge in mortgage applications at BoI

Mortgage applications at Bank of Ireland are up 25% on last year, the bank announced today.

Changes to stamp duty payments announced in last December's Budget have boosted the second-hand home market, the bank added - there was a 3% increase in first-time buyers purchasing second-hand homes in the four months after the Budget.

There is now no stamp duty payable on second hand properties up to the value of €317,500. On properties valued above this, stamp duty rates have been reduced.

Meanwhile, the average age of first-time buyers has fallen from 35 in 1990 to 32 today.

Bank of Ireland received mortgage applications for more than €0.5bn from first time buyers during the first quarter of the year, 25% up on the same period last year.

"The trend reflects the strengthened purchasing power of first-time buyers as a result of strong wage inflation, reductions in interest rates and stamp duty obligations," said a spokesperson for the bank.

Research from Bank of Ireland Mortgages database reveals the combined average salary of first-time mortgage applicants has risen by 64% in the past 10 years, from €39,251 in 1994 to €64,409 in 2004.

The average salary of people going it alone on a mortgage was €47,024 for men and €42,970 for women. The average first-time buyer mortgage now stands at €200,000, which translates to a monthly repayment of about €1,200.

Bank of Ireland Mortgages also revealed today that it has found a significant increase in the incidence of gift giving to first-time buyers, with the average gift at €30,000. One in four first-time mortgage applicants received a gift in 2004, compared to one in five in 2002.

The bank revealed however that the saving habits of first-time buyers are also boosting their purchasing power - there was an average individual saving of €16,500 before applying for a mortgage.

Of those first-time buyers who took out a mortgage with Bank of Ireland in 2004, 45% were single applicants whereas 55% bought jointly - a 2% increase in people buying property on their own in two years. This is on top of a 14% increase in the number of people buying alone between 1992 and 2002.

The figures also revealed that more men purchase a property on their own, the split being 60% male to 40% female, a trend that has been consistent since 1995. Of those buying jointly, 89% were co-habiting or were married, representing a slight increase (3%) in the number of people buying with friends or family since 2002.

The bank’s figures also reveal that the age of first-time buyers is decreasing with the average age now at 32, down from 35 in 1990. Qualitative research done on behalf of Bank of Ireland Mortgages by Landsdowne Market Research showed that first-time buyers still feel that the market is very buoyant and that prices will continue to rise, even if not at previous levels.

The research revealed a growing sense of urgency among young people, particularly those over the age of 30, to own their own property.

The bank’s customer database reveals a preference among first-time buyers for houses, with 35% buying a semi detached house, 21% a detached house, 15% a terraced house, 14% a bungalow and only 12 % an apartment.