Huge drop in mortgage switching leads to 'slowdown' in approval activity

The number of mortgage approvals during March dropped by 1.2% compared to the same time last year. 

Mortgage switching activity during March fell by over 50% compared to the same period last year leading to a slight drop in overall approvals, new figures from the Banking and Payments Federation (BPFI) shows.

In total, there were 4,520 mortgages approved during the month of March worth a combined value of €1.3bn. While the volume of mortgages approved dropped by 1.2% compared to March 2022, their value increased by €93m.

The most dramatic year-on-year change was seen in re-mortgage and switching activity which dropped 54.4% from 867 to 395 with their value also dropping from €229m to €107m.

This drop was mitigated by an increase in the number of first-time-buyer (FTB) approvals, up 15.7% to 2,801, and mover-purchasers approvals, up 7.7% to 1,019. The value of FTBs now account for 62% of all approvals, the biggest share since the data became available in July 2014. 

The value of mortgage approvals for FTBs increased from €655m in March 2022 to €819m last month while the value of mover-purchaser approvals went up to €332m from €284m.

The BPFI also released data showing there were 10,908 mortgages drawn down during the first three months of the year with a combined value of €2.87bn. This is a 10.1% increase in volume and a 14.1% increase in value compared to the same period in 2022.

However, compared to the last three months of 2022, it shows a 31.3% decrease in volume and 34.1% in value.

Brian Hayes, chief executive of the BPFI, said lending values continue to increase to the higher cost of homes. The average mortgage is now €290,000.

He added that while demand remains strong during the first three months of the year, overall the figures point to a “continued year-on-year slowdown” as mortgage switching decreases.