2023
0
Ireland Mortgages Market Report 2023
2023-04-05T04:02:20+01:00
OX1154595
1495
162137
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Report
en_GB
"Cost-of-living pressures as well as rising interest rates will combine to put a strain on new mortgage affordability, which will inevitably impact upon demand for new mortgages. While there may…

Ireland Mortgages Market Report 2023

£ 1,495 (Excl.Tax)

Description

“Cost-of-living pressures as well as rising interest rates will combine to put a strain on new mortgage affordability, which will inevitably impact upon demand for new mortgages. While there may be more demand for mortgage refinancing as consumers shop around for better deals, some existing mortgage holders may struggle to access remortgaging options due to the same affordability pressures.”

– Brian O’Connor, Senior Consumer Analyst

Key issues covered in this Report:

  • The impact of COVID-19 on the mortgage market in NI and RoI.
  • Market drivers and dynamics around mortgages.
  • Mortgage ownership and the types of mortgages currently held.
  • When existing mortgage deals are due to expire, and what mortgage holders intend doing when their existing deals expire.
  • Whether consumers intend applying for mortgages in the next 12 months, and the features of a home that have become more important to consumers over the last year.
  • Selected attitudes and behaviours relating to mortgages.

Table of Contents

  1. Overview

    • What you need to know
      • Key issues covered in this Report
        • Products covered in this Report
        • Executive Summary

            • The Market
              • Outstanding mortgage debt of more than €100 billion in 2023
                • Figure 1: Outstanding mortgage debt, actual, estimated, forecast and projected, IoI, RoI and NI, 2018-27
              • Further contraction likely in both NI and RoI, before growth resumes
                • Figure 2: Outstanding mortgage debt, actual, estimated, forecast and projected, RoI and NI, 2018-27
              • The impact of COVID-19 on mortgages
                • Figure 3: Category outlook for mortgages, short, medium and long term, 2023-28
              • Market Factors
                • High inflation squeezing household finances across Ireland
                  • Consumer uncertainty likely to reduce demand for new mortgages
                    • High property prices affecting affordability for many consumers
                      • Higher interest rates hitting current and prospective mortgage holders
                        • The Consumer
                          • 32% in NI, 27% in RoI currently have a mortgage
                            • Figure 4: Consumers’ current housing situation, NI and RoI, 2023
                          • Most mortgage holders opting for fixed-rate mortgages
                            • Figure 5: Type of mortgage currently held, NI and RoI, 2023
                          • Next 12 months will see expiration of 23% of NI, 11% of RoI mortgages
                            • Figure 6: When current mortgage deal due to expire, NI and RoI, 2023
                          • Higher level of loyalty or inertia among RoI mortgage holders
                            • Figure 7: What consumers are likely to do when their current mortgage deal expires, NI and RoI, 2023
                          • Most consumers have no intention of applying for a mortgage
                            • Figure 8: Whether consumers are considering applying for a mortgage (ie for a first home, new home or buy-to-let purchase) or a remortgage for their current home within the next 12 months, NI and RoI, 2023
                          • Greater focus on housing/living costs and outside space
                            • Figure 9: Features of a home that have become more important to consumers in the last 12 months, NI and RoI, 2023
                          • Sizeable minority overpaying, almost as many taking payment break
                            • Figure 10: Agreement with selected statements relating to mortgages, NI and RoI, 2023
                          • Doubts, worries and uncertainty surrounding mortgages currently
                            • Figure 11: Agreement with selected statements relating to mortgages, NI and RoI, 2023
                        • The Market – Key Takeaways

                          • High inflation squeezing household finances across Ireland
                            • Consumer uncertainty likely to reduce demand for new mortgages
                              • High property prices affecting affordability for many consumers
                                • Higher interest rates hitting current and prospective mortgage holders
                                • Market Size and Forecast

                                    • Short-, medium- and long-term impact on the industry
                                      • Figure 12: Category outlook for mortgages, short, medium and long term, 2023-28
                                    • Total mortgage market valued at almost €108 billion in 2022
                                      • Figure 13: Outstanding mortgage debt, actual, estimated, forecast and projected, IoI, RoI and NI, 2018-27
                                    • Expectation for contraction in mortgage market over next two years
                                      • Figure 14: Outstanding mortgage debt, actual, estimated, forecast and projected, RoI and NI, 2018-27
                                  • Market Drivers

                                    • Elevated inflation hitting household finances hard
                                      • Figure 15: Consumer price index, RoI and UK (including NI), 2016-22
                                      • Figure 16: Consumer price index, RoI and NI, March 2022-February 2023
                                      • Figure 17: Whether consumers have been affected by any of these issues over the last two months, NI and RoI, 2023
                                    • If inflation comes under control, mortgage rates should – in theory – come down
                                      • Wavering confidence likely to hit demand for new mortgages
                                        • Figure 18: How consumers feel their own financial situation compares to how it was a year ago, NI and RoI, 2023
                                        • Figure 19: How consumers feel about their financial situation over the next year, NI and RoI, 2023
                                      • House prices at or near all-time highs in RoI and NI
                                        • Figure 20: Residential property price index, RoI, 2005-22
                                        • Figure 21: House price index, NI, 2005-22
                                      • Mortgages rates rising, likely to put brakes on activity in 2023
                                        • Figure 22: Bank of England Base Rate, %, March 2020-February 2023
                                        • Figure 23: European Central Bank Base Rate, %, May 2013-March 2023
                                        • Figure 24: Average mortgage interest rates, existing and new loans, UK (including NI), August 2021-January 2023
                                        • Figure 25: Average mortgage interest rates, original maturity, RoI, February 2022-January 2023
                                      • Doubts as to whether most consumers could absorb increased mortgage costs
                                        • Figure 26: How consumers describe their current financial situation, NI and RoI, 2023
                                    • Companies and Innovations – Key Takeaways

                                      • Apps making mortgage services more accessible
                                        • Borrowers needing support amid the cost-of-living crisis
                                          • Investing helping younger generations strive towards home ownership
                                          • Who’s Innovating?

                                              • Fintech facilitating innovation for mortgage services
                                                • Firms will continue to support consumers during times of financial difficulty
                                                  • Figure 27: “How does your own financial situation compare to how it was a year or so ago?”, IoI, 2023
                                                • Investing in the future
                                                • Companies and Brands

                                                  • Allied Irish Bank
                                                    • Key facts
                                                      • Product portfolio
                                                        • Recent developments
                                                          • Bank of Ireland
                                                            • Key facts
                                                              • Product portfolio
                                                                • Recent developments
                                                                  • Danske Bank
                                                                    • Key facts
                                                                      • Product portfolio
                                                                        • Recent developments
                                                                          • Halifax
                                                                            • Key facts
                                                                              • Product portfolio
                                                                                • Recent developments
                                                                                  • HSBC
                                                                                    • Key facts
                                                                                      • Product portfolio
                                                                                        • Recent developments
                                                                                          • Nationwide
                                                                                            • Key facts
                                                                                              • Product portfolio
                                                                                                • Recent developments
                                                                                                  • Progressive Building Society
                                                                                                    • Key facts
                                                                                                      • Product portfolio
                                                                                                        • Recent developments
                                                                                                          • Santander
                                                                                                            • Key facts
                                                                                                              • Product portfolio
                                                                                                                • Recent developments
                                                                                                                • The Consumer – Key Takeaways

                                                                                                                  • 32% in NI, 27% in RoI currently have a mortgage
                                                                                                                    • Most mortgage holders opting for fixed-rate mortgages
                                                                                                                      • Next 12 months will see expiration of 23% of NI, 11% of RoI mortgages
                                                                                                                        • Higher tendency among RoI mortgage holders to stick with provider
                                                                                                                          • Most consumers have no intention of applying for a mortgage
                                                                                                                            • Greater focus on housing/living costs and outside space
                                                                                                                              • Sizeable minority overpaying, almost as many taking payment break
                                                                                                                                • Doubts, worries and uncertainty surrounding mortgages currently
                                                                                                                                • Mortgage Ownership

                                                                                                                                    • A quarter of RoI, a third of NI consumers have a mortgage
                                                                                                                                      • Figure 28: Consumers’ current housing situation, NI and RoI, 2023
                                                                                                                                    • Mortgage ownership highest among consumers aged 35-44
                                                                                                                                      • Figure 29: Consumers who own their own home but still have a mortgage, by age, NI and RoI, 2023
                                                                                                                                    • ABC1s and high earners most likely to have mortgages
                                                                                                                                      • Figure 30: Consumers who own their own home but still have a mortgage, by social class and annual household income, NI and RoI, 2023
                                                                                                                                    • Significant numbers of would-be FTBs renting in private sector
                                                                                                                                      • Figure 31: Consumers who are currently renting from a private landlord, by age, NI and RoI, 2023
                                                                                                                                      • Figure 32: Consumers who are currently renting from a private landlord, by social class and annual household income, NI and RoI, 2023
                                                                                                                                  • Types of Mortgages Held

                                                                                                                                      • Majority of mortgage holders have a fixed-rate mortgage
                                                                                                                                        • Figure 33: Type of mortgage currently held, NI and RoI, 2023
                                                                                                                                      • Consumers aged 25-44 most inclined to have fixed-rate mortgages
                                                                                                                                        • Figure 34: Consumers who currently have a fixed-rate mortgage on main home, by age, NI and RoI, 2023
                                                                                                                                      • Greater tendency for ABC1s, high earners to have fixed-rate mortgages
                                                                                                                                        • Figure 35: Consumers who currently have a fixed-rate mortgage on main home, by social class and annual household income, NI and RoI, 2023
                                                                                                                                    • When Current Mortgage Deals Due to Expire

                                                                                                                                        • 23% in NI, 11% in RoI are on deals set to expire within next year
                                                                                                                                          • Figure 36: When current mortgage deal due to expire, NI and RoI, 2023
                                                                                                                                        • Distinctly longer-term profile to mortgage terms in RoI
                                                                                                                                          • Figure 37: When current mortgage deal due to expire, NI and RoI, 2023
                                                                                                                                        • Higher level of loyalty or inertia among RoI mortgage holders
                                                                                                                                          • Figure 38: What consumers are likely to do when their current mortgage deal expires, NI and RoI, 2023
                                                                                                                                      • Expected Mortgage Activity in Next 12 Months

                                                                                                                                          • Around seven in 10 have no intention of taking out a mortgage loan
                                                                                                                                            • Figure 39: Whether consumers are considering applying for a mortgage (ie for a first home, new home or buy-to-let purchase) or a remortgage for their current home within the next 12 months, NI and RoI, 2023
                                                                                                                                          • Younger consumers most likely considering mortgage applications
                                                                                                                                            • Figure 40: Consumers who say they are not considering applying for a mortgage (ie for a first home, new home or buy-to-let purchase) or a remortgage for their current home within the next 12 months, by age, NI and RoI, 2023
                                                                                                                                          • Mortgage application intent highest among ABC1s and high earners
                                                                                                                                            • Figure 41: Consumers who say they are not considering applying for a mortgage (ie for a first home, new home or buy-to-let purchase) or a remortgage for their current home within the next 12 months, by social class and annual household income, NI and RoI, 2023
                                                                                                                                          • Applications more likely from consumers in full-time employment
                                                                                                                                            • Figure 42: Consumers who say they are not considering applying for a mortgage (ie for a first home, new home or buy-to-let purchase) or a remortgage for their current home within the next 12 months, by current working situation, NI and RoI, 2023
                                                                                                                                          • Consumers renting privately looking to apply for mortgages
                                                                                                                                            • Figure 43: Consumers who say they are not considering applying for a mortgage (ie for a first home, new home or buy-to-let purchase) or a remortgage for their current home within the next 12 months, by current housing situation, NI and RoI, 2023
                                                                                                                                        • Important Features of a Home

                                                                                                                                            • Cost-of-living crisis heightening focus on housing/living costs
                                                                                                                                              • Figure 44: Features of a home that have become more important to consumers in the last 12 months, NI and RoI, 2023
                                                                                                                                            • Affordability not necessarily related to income or capacity to pay
                                                                                                                                              • Housing priorities change with the arrival of children
                                                                                                                                              • Mortgage Behaviours

                                                                                                                                                  • More than a quarter overpaying, but some taking payment break
                                                                                                                                                    • Figure 45: Agreement with selected statements relating to mortgages, NI and RoI, 2023
                                                                                                                                                  • Higher earners, financially healthy consumers most likely overpaying
                                                                                                                                                    • Lower earners, young families on mortgage breaks due to pressures
                                                                                                                                                      • Appetite for increased borrowing down in face of rising interest rates
                                                                                                                                                      • Mortgage Attitudes

                                                                                                                                                          • Lack of confidence; some negativity around mortgages currently
                                                                                                                                                            • Figure 46: Agreement with selected statements relating to mortgages, NI and RoI, 2023
                                                                                                                                                          • Low earners, financially struggling agree deposit requirement too high
                                                                                                                                                            • Concern about property values also highest among lower earners
                                                                                                                                                              • Broad consensus that it is not a good time to apply for a new mortgage
                                                                                                                                                              • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                                • Data sources
                                                                                                                                                                  • Generational cohort definitions
                                                                                                                                                                    • Abbreviations

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