Mortgage drawdowns fall by almost a third despite September rebound

Figures for mortgage approvals the month of September increased by more than 20% compared to September 2019

Mortgage drawdowns fell by 30.3% in volume and 25.8% in value on the corresponding third quarter of 2019. Picture: iStock

The number of mortgages drawn down from Irish banks in the third quarter fell by almost a third compared to last year new figures show.

Between July and the end of August, 8,220 new mortgages to the value of €1.9 billion were drawn down by borrowers. This represents a fall of 30.3% in volume and 25.8% in value on the corresponding third quarter of 2019.

Banking & Payments Federation Ireland (BPFI), who published the figures said it remains to be seen what impact the latest Covid-19 restrictions will have on prospective homebuyers and the mortgage market.

Compared to the second quarter of this year, the latest figures represent an increase of 24.1% in mortgage drawdown volume and 33.8% in value. First-time buyers (FTBs) remained the single largest segment by volume (51.3%) and by value (52.9%).

Despite the significant fall in the third quarter, figures for mortgage approvals in the month of September increased by more than 20% compared to September 2019. Mortgages approved in September rose by 19.3% month-on-month and 20.8% year-on-year.

Brian Hayes, Chief Executive, BPFI said the drawdown figures show another difficult quarter. "It should be noted however that the year-on-year decline is less than the decline we saw in the second quarter of this year," he said.

"Additionally, the increased activity in mortgage approvals we’ve seen in September is encouraging and provides a much-improved pipeline for drawdowns in the months ahead. It remains to be seen however what impact the latest Covid 19 public health measures with restricted economic activity is likely to have on prospective homebuyers and the mortgage market.”

Mr Hayes said the increase in September reflects not only the relaxation of the Covid-19 restrictions during the summer but also demonstrates an "encouraging level of resilience" in the market.