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Mortgages - Ireland - March 2015

Published By :

Mintel

Published Date : Mar 2015

Category :

Banking

No. of Pages : 98 Pages

After years of decline and contraction, growth and momentum has returned to the Irish property market, which has, in turn, fostered confidence and positivity among Irish consumers. Once again, purchasing residential property in Ireland looks to be attractive and consumers view a mortgage loan as an opportunity rather than a millstone.
Table of Content

Introduction

Key themes in the report
Data sources
Definitions
Abbreviations

Executive Summary

The market
Figure 1: Value of outstanding mortgage debt, NI and RoI, 2010-14
Forecast
Figure 2: Index of value of outstanding mortgage debt, NI and RoI, 2010-19
Market factors
Low interest rates drawing consumers to mortgage loans
Property market across Ireland firmly in recovery
Increase in property transactions indicates some return to normality
Economic growth fostering growing consumer confidence
The consumer
Significant minority of Irish consumers have mortgage on main property
Figure 3: If consumers (or their partner) currently have a mortgage on the property they live in as their main residence, NI and RoI, December 2014
Majority of consumers have no intention of applying for a mortgage in coming year
Figure 4: If consumers intend applying for a mortgage (ie for a first home, home move, or buy-to-let purchase) or a remortgage for their current home within the next 12 months, NI and RoI, December 2014
Difference in opinion reflects different economic, financial and banking environment
Figure 5: Attitudes towards mortgages and mortgage-related issues, RoI and NI, December 2014
What we think

Issues and Insights

How likely is an increase in switching behaviour among consumers?
The facts
The implications
What are consumers’ preferences when arranging mortgages?
The facts
The implications
Are consumers comfortably managing their mortgage repayments?
The facts
The implications

Market Overview

Key points
Low interest rates keeping mortgages affordable and attractive
Property prices across Ireland exhibiting post-crash growth
Figure 6: Residential property price index, NI, Q4 2006-Q4 2014
Figure 7: Residential property prices, annual % change, NI, Q4 2006-Q4 2014
NI property prices on course for 4% growth in 2015
Despite recent recovery, NI property market still accessible to FTBs
Figure 8: Average residential property prices, UK, by country, 2014
RoI market went from high to low between 2007 and 2012
Figure 9: Residential property price index, RoI, 2005-14
Figure 10: Residential property prices, annual % change, RoI, 2006-14
RoI prices currently down 38.5% on peak values
NI property market to benefit from recent stamp duty changes
Co-Ownership Housing Scheme opens the door for would-be buyers
New lending rules in RoI intended to ensure prudent lending
Housing transactions in NI and RoI on the increase
Figure 11: Number of verified residential property sales, NI, 2007-14
Figure 12: Residential property transactions, by county, RoI, 2014
Irish consumers regaining confidence after stresses of recession
Figure 13: Consumer Confidence Index, NI, December 2011-December 2014
Figure 14: Consumer Confidence Index, RoI, February 2011-February 2015

Market Size and Forecast

Key points
All-Ireland mortgage market valued at €111 billion (£92.5 billion) in 2014
Figure 15: Value of outstanding mortgage debt, All-Ireland, NI and RoI, actual, 2010-19
Outstanding mortgage value to exceed €130 billion by 2019
Figure 16: Value of outstanding mortgage debt, All-Ireland, NI and RoI, 2010-19
Mortgage loan volume in NI up 30% between 2013 and 2014
Figure 17: Total number of loans advanced for house purchase, NI, Q4 2012-Q4 2014
Figure 18: Total number of loans advanced for house purchase, NI, 2011-14
Figure 19: Mortgage loans advanced, by category, NI, 2011-14
Loan volume up more than 45% in RoI between 2013 and 2014
Figure 20: Total number of mortgage loans issued, RoI, Q4 2012-Q4 2014
Figure 21: Total number of mortgage loans issued, RoI, 2006-14
Value of mortgage loans up 40% in NI from 2013-14
Figure 22: Total value of loans advanced for house purchase, NI, Q4 2012-Q4 2014
Figure 23: Total value of loans advanced for house purchase, NI, 2011-14
Value of mortgage loans in RoI up 55% between 2013 and 2014
Figure 24: Total value of mortgages issued, RoI, Q4 2012-Q4 2014
Figure 25: Total value of mortgages issued, RoI, 2006-14
First-time buyer and home mover affordability better in NI than in UK

Strengths and Weaknesses

Strengths
Weaknesses

Companies and Innovations

Key facts
Nationwide launches new video link service offering customers greater access to mortgages
Tesco expands into the UK’s mortgage market by selling loans through brokers
Lloyds Bank joins in UK home building scheme
Company profiles
Allied Irish Bank (AIB)
Bank of Ireland
Danske Bank (NI only)
Halifax (NI only)
HSBC (NI only)
KBC Bank Ireland
Nationwide (NI only)
Permanent TSB (RoI only)
Santander
Ulster Bank

The Consumer – Ownership of Mortgages

Key points
More than a third of consumers currently have a mortgage
Figure 26: If consumers (or their partner) currently have a mortgage on the property they live in as their main residence, NI and RoI, December 2014
Mortgage ownership highest among consumers aged 35-44
Figure 27: If consumers (or their partners) currently have a mortgage on the property they live in as their main residence, by age, NI and RoI, December 2014
Full-time employed and ABC1s most like to have mortgages
Figure 28: If consumers (or their partners) currently have a mortgage on the property they live in as their main residence, by work status and social class, NI and RoI, December 2014
Married/cohabiting consumers most likely to have mortgages
Figure 29: If consumers (or their partners) currently have a mortgage on the property they live in as their main residence, by marital status, NI and RoI, December 2014
Variable/tracker rates dominant in RoI, fixed-term rates dominant in NI
Figure 30: Type of mortgage owned, NI and RoI, December 2014
NI consumers more convinced about merits of switching to a fixed rate
Evidence of confusion surrounding interest-only mortgages

The Consumer – Future Intentions

Key points
Future mortgage demand significantly higher in NI than in RoI
Figure 31: If consumers intend applying for a mortgage (ie for a first home, home move, or buy-to-let purchase) or a remortgage for their current home within the next 12 months, NI and RoI, December 2014
Buy-to-let activity looking up for year ahead among NI consumers
25-34-year-olds least inclined to dismiss future mortgage application
Figure 32: Consumers who say they will not be applying for a mortgage or remortgage within the next 12 months, by age and social class, RoI and NI, December 2014
Doubts around ability to qualify for a mortgage a major deterrent
Figure 33: Agreement with statement ‘I do not think that I would be able to get a new mortgage/remortgage at the moment’, by age and social class, NI and RoI, December 2014

The Consumer – Attitudes towards Mortgages

Key points
Some difference of opinion between NI and RoI consumers
Figure 34: Attitudes towards mortgages and mortgage-related issues, RoI and NI, December 2014
Preference for dealing with banks over mortgage brokers or advisers
Figure 35: Agreement with statements relating to arrangement of mortgages and arrangement fees, NI and RoI, December 2014
NI consumers more open to switching than RoI consumers
Figure 36: Agreement with statements relating to switching mortgage type and mortgage provider, NI and RoI, December 2014
NI consumers more comfortable sustaining mortgages
Figure 37: Agreement with statements relating to affordability and payments, NI and RoI, December 2014

Appendix

NI Toluna data
Figure 38: If a consumer (or their partner) currently have a mortgage on the property they live in as their main house, by demographics, NI, December 2014
Figure 39: Types of mortgages currently owned, by demographics, NI, December 2014
Figure 40: If consumers intend applying for a mortgage (ie for a first home or buy-to-let purchase) or a remortgage for their current home within the next 12 months, by demographics, NI, December 2014
Figure 41: If consumers who intend on applying for a mortgage in the next 12 months would consider applying to the Co-Ownership Housing Scheme, by demographics, NI, December 2014
Figure 42: Agreement with statements relating to mortgages, by demographics, NI, December 2014
Figure 43: Agreement with statements relating to mortgages, by demographics, NI, December 2014 (continued)
Figure 44: Agreement with statements relating to mortgages, by demographics, NI, December 2014 (continued)
RoI Toluna data
Figure 45: If a consumer (or their partner) currently have a mortgage on the property they live in as their main house, by demographics, RoI, December 2014
Figure 46: Types of mortgages currently owned, by demographics, RoI, December 2014
Figure 47: If consumers intend applying for a mortgage (ie for a first home or buy-to-let purchase) or a remortgage for their current home within the next 12 months, by demographics, RoI, December 2014
Figure 48: Agreement with statements relating to mortgages, by demographics, RoI, December 2014
Figure 49: Agreement with statements relating to mortgages, by demographics, RoI, December 2014 (continued)
Figure 50: Agreement with statements relating to mortgages, by demographics, RoI, December 2014 (continued)

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