Banking industry reports 50% increase in mortgage approvals in July

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The number of mortgages approved in July increased by over 50 per cent compared to June according to latest figures from the Banking and Payments Federation Ireland (BPFI).

While there was a month-on-month increase the figures for July were down by 33.8 per cent compared with July 2019. Over half of the number and value of approvals went to first-time buyers (FTB).

A total of 3,397 mortgages were approved in July — FTBs were approved for 1,883 mortgages (55 per cent of total volume) while mover purchasers accounted for 750 (22 per cent).

Mortgages approved in July 2020 were valued at €811 million — of which FTBs accounted for €462 million (57 per cent), and mover purchasers for €196 million (24 per cent).

Dr Ali Ugur, Chief Economist, BPFI said that with the reopening of the economy, banks have seen a significant increase in mortgage approval numbers in July compared to the previous month.

“However on a year-on-year basis, approval numbers are still down which is not unexpected,” she said.

“On the other hand, when we look at annualised mortgage approval activity, which is a better indicator of the trend, there were 40,090 mortgage approvals in the 12 months ending July 2020, valued at €9,238 million.

“Annualised mortgage approval activity to end-July 2020 decreased in volume terms by 4.1% compared with the 12 months ending June 2020 and decreased in value terms by 3.7% over the same period.”

The monthly report shows there were 2,713 purchase mortgage approvals (FTB, mover purchase, and residential investment letting), valued at €671 million in July 2020. Purchase mortgage approval activity fell in volume terms by 35.8 per cent year-on-year and decreased in value terms by 33.2 per cent over the same period.

Mortgage approvals reached 3,733 in March before falling to 2,200 in April and then 1,879 in May as the impact of the Covid-19 restrictions took hold. 

In response to the impact of Covid-19, retail banks in Ireland have provided over 70,000 mortgage payment breaks.

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