Mortgage approvals drop 6% in June – BPFI report

But BPFI chief Brian Hayes said it was the third strongest June for first-time buyer approval volumes since the data began in 2011

Banking and Payments Federation Ireland data shows that approvals for first-time buyers fell over 9% in June compared to the same month last year. Picture: iStock

Mortgage approvals slumped by 6% during June as the number of first-time buyers and mover-purchasers fell compared to last year, new data from the Banking and Payments Federation, Ireland (BPFI) shows.

In June, approvals for first-time buyers dropped 9.1% year-on-year to 2,740, while the number of mover-purchaser approvals dropped 10.4% to 980.

However, the sector did experience an increase in switcher mortgage activity, approvals in residential investment letting, as well as top-up mortgage approvals, all up 24.3%, 26.5%, and 3.4% respectively.

BPFI chief executive Brian Hayes said while the overall volume of approvals was down last month, it was still the “third strongest June for FTB approval volumes since the data began in 2011, pointing to a robust pipeline for FTB drawdowns in the months ahead”.

In total, there were 4,480 mortgages approved during June, worth a combined €1.34bn.

The BPFI also published its latest mortgage drawdown figures for the period April to June. Of the 10,110 new mortgages drawn down during those three months, 6,300 were first-time buyers and 2,098 were mover-purchasers. This represented a 5.5% increase for first-time buyers but a 3.1% decline for mover-purchasers.

Mr Hayes said first-time buyer drawdown volumes have hit their highest second quarter levels since 2007 but the downturn in mover-purchaser drawdowns continues.

“This is the seventh consecutive quarter in which mover-purchase drawdown volumes have fallen in year-on-year terms,” he said. 

The combined value of all these drawdowns stood at €2.85bn, which is up 3.3% year-on-year.

According to the BPFI, new properties, including self-builds, accounted for 34.3% of home purchase mortgage drawdowns between April and June, up from 30.4% last year.

First-time buyers accounted for over 83% of home mortgage drawdowns on new properties.

Mr Hayes said this indicates “strong momentum on both new home building and Government first-time buyer incentives”.