With the COVID-19 pandemic continuing to affect the world, activity across most mortgage categories has increased a great amount within the last few months. Specifically, mortgage approvals in Ireland hit an all-time high in April 2021.
During April first-time buyers rushed to the market, causing mortgage approvals to remain strong, and even increase, throughout the month. At the beginning of June 2021, The Banking & Payments Federation Ireland (BPFI) published the latest figures from the BPFI Mortgage Approvals Report for April 2021, giving more insight on this rise in mortgage approvals.
The report states that a total of 4,362 mortgages valued at €1,089 million were approved in April 2021. Almost 55% of the total volume of mortgages approved were for first-time buyers. In comparison, mover purchasers accounted for 23.2% of mortgages approved in volume and 27.3% in value. The number of mortgages approved rose by 0.9% month-on-month, as well as 98.3% compared to the same period in 2020. The value of mortgage approvals was 2.4% higher month-on-month and 107.5% higher year-on-year. A key detail to remember when looking at the comparison between April 2020 and April 2021 is that April 2020 was the period in which the pandemic began to take hold and have a major effect on the market.
Brian Hayes, Chief Executive of BPFI, spoke on the results of the latest figures of the BPFI Mortgage Approvals Report for April 2021, stating: “April was another strong month for mortgage approvals, especially for first-time buyers. Compared with April last year, when the country was experiencing its first lockdown, there has been a doubling of activity across most mortgage categories during April 2021. It is important we look at the figures in the context of how different those two lockdowns have been and take into account how well lenders and customers have adapted in the intervening 12 months to working within Level 5 restrictions.”
Looking closer at the 12 months between April 2020 and April 2021, the report shows that 46,131 mortgages, valued at €11.2 billion, were approved. This is the highest value since the organization began the mortgage approval data series in 2011. The main drive behind this growth was from first-time buyer approvals, which increased 5.9% in the 12 months ending in March 2021 and increased to almost €6.2 billion in the 12 months ending in April 2021.
The increase in mortgage approvals during March and April 2021, has been way higher than what could have been expected. This improvement has left Chief Executive of BPFI, Brian Hayes, with the feeling that “these trends point to a solid pipeline for drawdown activity later in the year.” It will be interesting to see whether mortgage activity levels remain high or begin to decline in the following months.
Bryce, Russell. “BPFI Mortgage Approvals Report April 2021.” Banking & Payments Federation Ireland, 31 May 2021, bpfi.ie/publications/bpfi-mortgage-approvals-report-april-2021/.
O’Brien, Ciara. “Mortgage Approvals Strong in April as First-Time Buyers Drive Market.” The Irish Times, The Irish Times, 1 June 2021, www.irishtimes.com/business/economy/mortgage-approvals-strong-in-april-as-first-time-buyers-drive-market-1.4580910.