Ireland Mortgages Market Report 2022

Consumer Reports Mortgage and Loans Europe Ireland

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Report Summary

“Despite the spectre of soaring inflation and rising interest rates, consumer confidence remains relatively strong, while forecasts for employment and the broader economy augur well. All of this suggests that demand for mortgages will continue to be broadly positive, notwithstanding the effect of rising prices on affordability.”

– Brian O’Connor, Senior Consumer Analyst

This report will look at the following areas:

The impact of COVID-19 on the mortgage market in NI and RoI.
Market drivers and dynamics in the mortgage sector.
Mortgage ownership, types of mortgages owned and main providers of mortgages in Ireland.
When consumers’ mortgage deals are due to expire and what they intend doing when this happens.
The features that would be most important to consumers if looking for a new home.
Attitudes and behaviours around mortgages and mortgage providers.

Overview
- What you need to know
- Key issues covered in this Report
- Products covered in this Report
Executive Summary
- The impact of COVID-19 on the mortgage market
  - Figure 1: Short-, medium- and long-term impact of COVID-19 on mortgage loans, March 2022
- The market
- Outstanding mortgage debt totalled €93.8 billion in 2021, down 3.5%
  - Figure 2: Outstanding mortgage debt, actual, estimated, forecast and projected, IoI, RoI and NI, 2017-26
- Mortgage market returning to growth with measure and moderation
  - Figure 3: Index of outstanding mortgage debt, actual, estimated, forecast and projected, RoI and NI, 2017-26
- Market Drivers
- Consumer confidence waning slightly in NI and RoI
- Improving employment situation will benefit mortgage market
- Rapidly increasing property prices jeopardise affordability
- High inflation rate putting pressure on interest rates
- Who’s innovating?
- The consumer
- 30% in RoI, 27% in NI have an outstanding mortgage
  - Figure 4: Home/mortgage ownership status, NI and RoI, 2021
- More than half of mortgages in NI and RoI are fixed-rate loans
  - Figure 5: Type of mortgage that consumers with mortgages currently hold on their main home, NI and RoI, 2021
- Half NI, a third RoI mortgage deals expiring within next two years
  - Figure 6: When consumers’ current mortgage deal due to expire, NI and RoI, 2021
- In RoI, 77% of mortgages provided by just five providers
  - Figure 7: Providers that consumers currently hold their mortgage with, RoI, 2021
- More than half of NI mortgages provided by four lenders
  - Figure 8: Providers that consumers currently hold their mortgage with, NI, 2021
- Property size and outdoor space the most important home features
  - Figure 9: Features of a home that would be most important to consumers if looking for a new home, NI and RoI, 2021
- Most want more transparency over mortgage arrangement charges
  - Figure 10: Agreement with selected statements about mortgages, NI and RoI, 2021
- What we think
The Market – Key Takeaways
- Consumer confidence waning slightly in NI and RoI
- Improving employment situation will benefit mortgage market
- Rapidly increasing property prices jeopardise affordability
- High inflation rate putting pressure on interest rates
Market Size and Forecast
- Short-, medium- and long-term impact on the industry
  - Figure 11: Short-, medium- and long-term impact of COVID-19 on mortgage loans, March 2022
- Outstanding mortgage debt down almost 3.5% in 2021
  - Figure 12: Outstanding mortgage debt, actual, estimated, forecast and projected, IoI, RoI and NI, 2017-26
- Market rebounding, but more tentatively than previously expected
  - Figure 13: Index of outstanding mortgage debt, actual, estimated, forecast and projected, RoI and NI, 2017-26
Market Drivers
- Consumer sentiment dips due to surging inflation and conflict concerns
- RoI consumers feeling jitters around cost of living and Ukraine conflict
  - Figure 14: Consumer sentiment index, RoI, 2021-22
  - Figure 15: Consumer sentiment index, components, RoI, 2022
- NI consumer confidence weakened towards end of 2021
  - Figure 16: Consumer confidence index, NI, Q4 2020-Q4 2021
  - Figure 17: Consumer sentiment index, components, NI, Q4 2020 and Q4 2021
- Sustained fall in unemployment will benefit mortgage market
- RoI economy heading towards full employment
  - Figure 18: Unemployment rate, seasonally adjusted and non-seasonally adjusted, RoI, 2021-22
- Number of payrolled employees in NI exceeds pre-COVID level
- Rising property prices generate buzz, but reduce affordability
- NI property prices up more than 8% year-on-year in Q4 2021
  - Figure 19: Average property price, £, NI, Q1 2019-Q4 2021
- RoI property prices up by over 14% in 2021
  - Figure 20: Property prices, index, RoI, 2007-21
- Rising prices threaten affordability, particularly in Dublin
- Soaring inflation putting pressure on household finances, interest rates
  - Figure 21: Annual rate of inflation, UK (including NI) and RoI, 2012-21
  - Figure 22: Annual rate of inflation, UK (including NI) and RoI, March 2021-February 2022
- - Figure 23: Whether consumers have been affected by any of these issues over the last 2 months (selecting all that apply), IoI, RoI and NI, 2021
- Both BoE and ECB base rates likely to rise in coming months
  - Figure 24: Bank of England base rate, UK (including NI), 2006-22
- ECB holds rate at 0% but end-of-year increase seems inevitable…
  - Figure 25: European Central Bank, base rate, RoI, 2007-16
- …with mortgages likely to become more expensive as a result
- Almost a quarter of consumers fared well financially during pandemic
  - Figure 26: How consumers’ financial situation has changed since the start of the COVID-19 outbreak in their country, IoI, RoI and NI, 2021
Companies and Innovations – Key Takeaways
- Attention pivots to include younger consumers
- Companies continue to offer financial guidance
- Further development of marketing strategies
Who’s Innovating?
- Mortgage companies to appeal to younger consumers
  - Figure 27: Consumers who selected “Own my home” as their personal definition of financial success, by age, NI and RoI, 2021
- More support being offered to consumers
  - Figure 28: “How has your financial situation changed since the start of the COVID-19 outbreak in your country?”, IoI, 2022
- Companies advancing their marketing strategies
  - Figure 29: Key factors driving consumer behaviour around value and technology – select items, NI and RoI, 2021
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
- KBC Ireland
- 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
- Ulster Bank
- Key Facts
- Product Portfolio
- Recent Developments
The Consumer – Key Takeaways
- 30% in RoI, 27% in NI have an outstanding mortgage
- In RoI, 77% of mortgages provided by just five providers
- More than half of NI mortgages provided by four lenders
- More than half of mortgages in NI and RoI are fixed-rate loans
- Half of NI and a third of RoI mortgage deals expiring within next two years
- Property size and outdoor space the most important home features
- Most want more transparency over mortgage arrangement charges
Ownership of Mortgages
- Around six in 10 consumers in Ireland are homeowners
  - Figure 30: Home/mortgage ownership status, NI and RoI, 2021
- Mortgage ownership highest among 35-54s and ABC1s
  - Figure 31: Consumers who own their own home but still have a mortgage, by age, NI and RoI, 2021
- Most over-65s own their own home without a mortgage
  - Figure 32: Consumers who own their own home mortgage-free, by age, NI and RoI, 2021
- More than a quarter of consumers live in rented accommodation
  - Figure 33: Consumers who rent from a private landlord, by age, NI and RoI, 2021
- - Figure 34: Consumers who rent from a private landlord, by household income, NI and RoI, 2021
Mortgage Providers
- Five providers control more than three quarters of RoI market
  - Figure 35: Providers that consumers currently hold their mortgage with, RoI, 2021
- Four biggest providers hold just over half of NI market
  - Figure 36: Providers that consumers currently hold their mortgage with, NI, 2021
Types of Mortgages Held
- Majority of mortgages in Ireland are fixed-rate loans
  - Figure 37: Type of mortgage that consumers with mortgages currently hold on their main home, NI and RoI, 2021
- Almost a quarter of RoI and a tenth of NI borrowers have trackers
- Around one in six borrowers on SVR, but likely to decline
Mortgage Deals and Expiration
- 17% in NI, 14% in RoI on mortgage deals expiring within the next year
  - Figure 38: When consumers’ current mortgage deal due to expire, NI and RoI, 2021
- RoI borrowers more inclined to make long-term commitment
  - Figure 39: When consumers’ current mortgage deal is due to expire, NI and RoI, 2021
- Borrowers split between staying loyal and shopping around
  - Figure 40: What consumers are most likely to do when their current mortgage deal expires, RoI, 2021
Future Intentions
- Most consumers not considering imminent mortgage application
  - Figure 41: Whether consumers intend applying for a mortgage or remortgage within the next 12 months, NI and RoI, 2021
- Mortgage applications most likely to come from 18-44s
  - Figure 42: Consumers who do not intend applying for a mortgage or remortgage within the next 12 months, by age, NI and RoI, 2021
- Work status, income key factors in likelihood to apply for a mortgage
  - Figure 43: Consumers who do not intend applying for a mortgage or remortgage within the next 12 months, by work status, NI and RoI, 2021
  - Figure 44: Consumers who do not intend applying for a mortgage or remortgage within the next 12 months, by socio-economic background, NI and RoI, 2021
- - Figure 45: Consumers who do not intend applying for a mortgage or remortgage within the next 12 months, by annual household income, NI and RoI, 2021
- Consumers in cities, urban areas most likely to be pondering application
  - Figure 46: Consumers who do not intend applying for a mortgage or remortgage within the next 12 months, by area, NI and RoI, 2021
- Consumers renting privately most likely to apply for mortgages
  - Figure 47: Consumers who do not intend applying for a mortgage or remortgage within the next 12 months, by tenure, NI and RoI, 2021
Important Features in a New Home
- COVID-19 experience influencing consumers’ home priorities
  - Figure 48: Features of a home that would be most important to consumers if looking for a new home, NI and RoI, 2021
- Older consumers most likely to prioritise size and outdoor space
- One in three younger consumers cite proximity to work as important
Attitudes and Behaviours
- Consensus that mortgage arrangement charges lack transparency
  - Figure 49: Agreement with selected statements about mortgages, NI and RoI, 2021
- Around half see benefits of longer deal, but a high level of uncertainty
- Significant minorities either overpaying or planning on borrowing more
- Increased cost, anxiety over value affecting one in four mortgage holders
Appendix – Data Sources, Abbreviations and Supporting Information
- Data sources
- Generational cohort definitions
- Abbreviations

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Ireland Mortgages Market Report 2022

Report Summary

Table of Contents

Overview

Executive Summary

The Market – Key Takeaways

Market Size and Forecast

Market Drivers

Companies and Innovations – Key Takeaways

Who’s Innovating?

Companies and Brands

The Consumer – Key Takeaways

Ownership of Mortgages

Mortgage Providers

Types of Mortgages Held

Mortgage Deals and Expiration

Future Intentions

Important Features in a New Home

Attitudes and Behaviours

Appendix – Data Sources, Abbreviations and Supporting Information

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