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Mortgages - Ireland - March 2015

“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.”
– Brian O’Connor, Production Manager

This report answers the following questions:

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

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Table of contents

  1. 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)

                                                                                                                    Companies Covered

                                                                                                                    To learn more about the companies covered in this report please contact us.

                                                                                                                    Mortgages - Ireland - March 2015

                                                                                                                    US $1,466.97 (Excl.Tax)