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Buying boom More mortgages granted but workers in Covid-hit sectors struggle to be approved

The surge in home-loan approvals comes despite banks being reluctant to advance mortgages to workers in a range of sectors affected by Covid-19

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House keys (PA)

House keys (PA)

PA

House keys (PA)

The number of prospective borrowers being approved for a mortgage continues to rise.

Almost 5,200 potential buyers got the go-ahead from their lender last month, a quarter more than in November last year.

The mortgage market continues to recover after it came to a virtual standstill earlier in the year due to the pandemic and lockdown.

The Banking and Payments Federation said just over half of those approved for a mortgage are first-time buyers.

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Brian Hayes of the Banking and Payments Federation

Brian Hayes of the Banking and Payments Federation

Brian Hayes of the Banking and Payments Federation


The number of mortgages approved was up 24pc on the same month last year. It was down by 0.2pc on the October figure. October was the busiest month for mortgage approvals since the banking federation began recording approval activity in 2011.

Mortgages approved last month were valued at €1.281bn. Some €692m of this was accounted for by first-time buyers, with mover purchasers for approved for borrowing worth €388m.

The overall value of mortgage approvals in November was up by a third in the year.

Approval values are the highest since the Banking and Payments Federation Ireland started collecting this data nine years ago.

The figures are considered very strong, as the country was in lockdown for much of last month.

Financial experts said there is a huge element of catch-up evident in the figures as people with money rush to buy, having had their purchasing plans disrupted by the pandemic earlier in the year.

Chief executive of the banking lobby group Brian Hayes said November saw solid growth in mover purchase activity. And the average mover purchase approval exceeded €280,000 for the first time, at €282,443. He said the market was catching up after sharp falls earlier in the year.

“Even though mortgage approvals are down by 15pc in volume terms and 9.9pc in value terms in the year to date, the continued strong activity we have in November represents a robust pipeline for drawdown activity,” Mr Hayes said.

He said these drawdowns were likely to be made in the coming months.

A mortgage approval is defined as a “firm offer” to a customer of a credit facility secured on a specific residential property. Not all approvals turn into mortgage drawdowns as often potential buyers are outbid, or they may have multiple approvals from different lenders and only draw down one of these.

The surge in home-loan approvals comes despite banks being reluctant to advance mortgages to workers in a range of sectors affected by Covid-19, with employers rather than applicants now being assessed for risk, according to brokers.

Even employees who are not in direct receipt of Covid supports can struggle to obtain a mortgage, brokers said.

Banks are said to be taking a dim view of those who work for employers that are availing of a scheme for other staff in a company.

Sectors where workers are finding it increasingly difficult to borrow include retail, hospitality, aviation, leisure and some parts of the construction industry.

Meanwhile, Bank of Ireland said its savings and investment index revealed that almost one in two people see now as a good time to save.

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Irish Independent


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