2021
0
Ireland Mortgages Market Report 2021
2021-04-16T04:06:27+01:00
OX1043509
1495
136745
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Report
en_GB
“Despite the disruptions to the market brought about by the COVID-19 outbreak, there remains strong demand for new mortgages among Irish consumers, which, together with the fact that interest rates…

Ireland Mortgages Market Report 2021

£ 1,495 (Excl.Tax)

Report Summary

“Despite the disruptions to the market brought about by the COVID-19 outbreak, there remains strong demand for new mortgages among Irish consumers, which, together with the fact that interest rates remain low and most consumers have managed to emerge from the pandemic unscathed, augurs well for the short- to medium-term future of the market.”
– Brian O’Connor, Senior Consumer Analyst

Key issues covered in this Report

  • The impact of COVID-19 on consumer confidence and finances with regard to mortgages.
  • Market drivers and dynamics in the mortgage sector.
  • Mortgage ownership and the types of mortgages owned.
  • When consumers’ mortgage deals are due to expire and their intentions after expiry
  • Where consumers typically obtain advice when taking out a mortgage.
  • Mortgage behaviour and concerns, including affordability.

Table of Contents

  1. Overview

    • What you need to know
      • Key issues covered in this Report
        • Products covered in this Report
          • Issues 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 2021
              • The market
                • Outstanding mortgage debt of almost €95 billion in 2021
                  • Figure 2: Outstanding mortgage debt, actual, estimated, forecast and projected, IoI, RoI and NI, 2016-25
                • Both NI and RoI markets look set to recover strongly from 2022 onwards
                  • Figure 3: Index of outstanding mortgage debt, actual, estimated, forecast and projected, IoI, RoI and NI, 2016-25
                • Market drivers
                  • COVID-19 outbreak has severely impacted 1 in 5 consumers
                    • Most consumers managing to maintain savings habit
                      • Almost a third say finances healthy, half say they are OK
                        • Consumers broadly positive about prospects for coming year
                          • Property prices in NI and RoI continuing upward trend
                            • Renting becoming increasingly expensive option in NI and RoI
                              • Interest rates low in NI, but costliest in Eurozone in RoI
                                • Who’s innovating?
                                  • The consumer
                                    • 36% of NI, 34% of RoI consumers have a mortgage
                                      • Figure 4: Consumers who currently have a mortgage on the property they live in as their main home, NI and RoI, January 2021
                                    • Fixed-rate mortgages most popular both in NI and RoI
                                      • Figure 5: Types of mortgages currently held on main home by consumers, NI and RoI, January 2021
                                    • 1 in 4 in NI, 1 in 6 in RoI on deals due to expire within next year
                                      • Figure 6: When consumers’ current mortgage deal is due to expire, NI and RoI, January 2021
                                    • Approaching half say they’ll talk first with existing provider
                                      • Figure 7: Likely behaviour when current mortgage deal expires, RoI and NI, January 2021
                                    • Most say they won’t be applying for new mortgage in coming year
                                      • Figure 8: Whether consumers are considering applying for a mortgage or a remortgage for current home within the next 12 months, NI and RoI, January 2021
                                    • Own bank/building society most popular source of advice
                                      • Figure 9: Type of professional adviser used as main source of advice when last arranged new mortgage product/remortgage on main home, NI and RoI, January 2021
                                    • Four in 10 have researched new deals in last year
                                      • Figure 10: Agreement with selected statements about mortgages, NI and RoI, January 2021
                                    • Brexit still a concern for significant minority in NI and RoI
                                      • Figure 11: Agreement with selected statements about mortgages, NI and RoI, January 2021
                                    • What we think
                                    • The Market – Key Takeaways

                                      • COVID-19 outbreak has severely impacted 1 in 5 consumers
                                        • Most consumers managing to maintain savings habit
                                          • Almost a third say finances healthy, half say they are OK
                                            • Consumers broadly positive about prospects for coming year
                                              • Property prices in NI and RoI continuing upward trend
                                                • Renting becoming increasingly expensive option in NI and RoI
                                                  • Interest rates low in NI, but costliest in Eurozone in RoI
                                                  • Market Size and Forecast

                                                      • Short-, medium- and long-term impact on the industry
                                                        • Figure 12: Short-, medium- and long-term impact of COVID-19 on mortgage loans, March 2021
                                                      • Outstanding mortgage debt down over 2% in 2020
                                                        • Figure 13: Outstanding mortgage debt, actual, estimated, forecast and projected, IoI, RoI and NI, 2016-25
                                                      • Market set to recover strongly – after slight further shrinkage
                                                        • Figure 14: Index of outstanding mortgage debt, actual, estimated, forecast and projected, IoI, RoI and NI, 2016-25
                                                    • Market Drivers

                                                      • Around 1 in 4 experienced permanent or temporary unemployment
                                                        • Figure 15: How consumers have been affected by the COVID-19 outbreak, NI and RoI, January 2021
                                                      • Slight increase in number of consumers with savings since COVID-19
                                                        • Figure 16: Consumers who had savings prior to COVID-19 outbreak and consumers who have savings currently, NI and RoI, January 2021
                                                        • Figure 17: How level of savings has changed since start of the COVID-19 outbreak, NI and RoI, January 2021
                                                      • Almost half of consumers describe finances as OK
                                                        • Figure 18: How consumers rate their own financial situation, NI and RoI, January 2021
                                                      • Most consumers positive about financial prospects over coming year
                                                        • Figure 19: How consumers expect their personal financial situation to change in the next 12 months, NI and RoI, January 2021
                                                      • NI house prices continuing to increase despite Brexit and COVID-19
                                                        • Figure 20: Northern Ireland House price Index, NI, 2010-20
                                                        • Figure 21: Northern Ireland House price Index, by property type and standardised prices, Q4 2010
                                                      • Volume of NI residential property sales down in 2020, but likely a blip
                                                        • Figure 22: Number of residential property sales in Northern Ireland, NI, 2010-20
                                                      • RoI house prices similarly defy COVID-19 disruptions
                                                        • Figure 23: House price Index, RoI, 2010-20
                                                        • Figure 24: House price Index, RoI, January-December 2020
                                                      • Expected impact of COVID-19 pandemic on city living not materialising
                                                        • Lack of supply a major factor pushing up prices in RoI
                                                          • Rental costs in NI and RoI increasing steadily – impacting FTBs
                                                            • Figure 25: Index of private housing rental prices, UK, 2015-20*
                                                            • Figure 26: Average rent by region, £ per month, NI, H1 2020
                                                            • Figure 27: National rent index, RoI, 2007-20
                                                            • Figure 28: Standardised average rent, € per month, Dublin, GDA and National (excluding Dublin), Q4 2020
                                                          • Interest rates on mortgages in NI close to all-time lows
                                                            • Figure 29: Overall weighted average interest rates, mortgages, UK (including NI), 2007-20
                                                            • Figure 30: Overall weighted average interest rates, mortgages, UK (including NI), Q1-Q4 2020
                                                          • Rate cuts not being passed on where higher risk identified
                                                            • RoI mortgage rates now the highest in the Euro area
                                                              • Figure 31: Mortgage interest rates, %, SVR, Tracker and Fixed rates, RoI, 2015-20
                                                              • Figure 32: Weighted average interest rates on loans for house purchase across the Euro area, January 2021
                                                          • Companies and Innovations – Key Takeaways

                                                            • New schemes introduced to support consumers with mortgages
                                                              • Green mortgages appeal to consumers with environmental concerns
                                                                • Banks launch new schemes to support all of their customers
                                                                • Who’s Innovating?

                                                                    • NatWest introduces green mortgages
                                                                      • New scheme set to help lenders offer 95% mortgages
                                                                        • Companies increase support for consumers
                                                                        • Company profiles

                                                                            • 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 development
                                                                                                            • HSBC
                                                                                                              • Key facts
                                                                                                                • Product portfolio
                                                                                                                  • Recent developments
                                                                                                                    • KBC Ireland
                                                                                                                      • Key facts
                                                                                                                        • Product portfolio
                                                                                                                          • Recent developments
                                                                                                                            • Nationwide
                                                                                                                              • Key facts
                                                                                                                                • Product portfolio
                                                                                                                                  • Recent developments
                                                                                                                                    • Permanent TSB (RoI only)
                                                                                                                                      • Key facts
                                                                                                                                        • Product portfolio
                                                                                                                                          • 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

                                                                                                                                                                • 36% of NI, 34% of RoI consumers have a mortgage
                                                                                                                                                                  • Fixed-rate mortgages most popular both in NI and RoI
                                                                                                                                                                    • 1 in 4 in NI, 1 in 6 in RoI on deals due to expire within next year
                                                                                                                                                                      • Approaching half say they’ll talk first with existing provider
                                                                                                                                                                        • Most say they won’t be applying for new mortgage in coming year
                                                                                                                                                                          • Own bank/building society most popular source of advice
                                                                                                                                                                            • 4 in 10 have researched new deals in last year
                                                                                                                                                                              • Brexit still a concern for significant minority in NI and RoI
                                                                                                                                                                              • Ownership of Mortgages

                                                                                                                                                                                  • More than one third of Irish consumers have a mortgage
                                                                                                                                                                                    • Figure 33: Consumers who currently have a mortgage on the property they live in as their main home, NI and RoI, January 2021
                                                                                                                                                                                  • 35-54s, ABC1s and high-earners most likely to have mortgages
                                                                                                                                                                                    • Figure 34: Consumers who currently have a mortgage on the property they live in as their main home, by household income, NI and RoI, January 2021
                                                                                                                                                                                  • Mortgage ownership relatively high among those ‘making ends meet’ or ‘struggling’
                                                                                                                                                                                    • Figure 35: Consumers who currently have a mortgage on the property they live in as their main home, by own assessment of personal financial situation, NI and RoI, January 2021
                                                                                                                                                                                • Types of Mortgages

                                                                                                                                                                                    • Majority of borrowers have a fixed-rate mortgage loan
                                                                                                                                                                                      • Figure 36: Types of mortgages currently held on main home by consumers, NI and RoI, January 2021
                                                                                                                                                                                    • Significant minorities in NI and RoI hold tracker mortgages
                                                                                                                                                                                      • Older borrowers and those reluctant to commit have SVR mortgages
                                                                                                                                                                                      • Mortgage Deals and Expiration

                                                                                                                                                                                          • 26% in NI, 16% in RoI on deal that will expire within the next year
                                                                                                                                                                                            • Figure 37: When consumers’ current mortgage deal is due to expire, NI and RoI, January 2021
                                                                                                                                                                                          • Most NI deals expire within 2 years, while RoI deals have more than 2 years
                                                                                                                                                                                            • Figure 38: When consumers’ current mortgage deal is due to expire, NI and RoI, January 2021
                                                                                                                                                                                          • Men and younger consumers more likely to have short-term deals
                                                                                                                                                                                            • Figure 39: When consumers’ current mortgage deal is due to expire, RoI, January 2021
                                                                                                                                                                                          • Half intend seeking new deal with existing provider after expiration
                                                                                                                                                                                            • Figure 40: Likely behaviour when current mortgage deal expires, RoI and NI, January 2021
                                                                                                                                                                                        • Future Intentions

                                                                                                                                                                                            • One in five consumers intend applying for mortgage or remortgage
                                                                                                                                                                                              • Figure 41: Whether consumers are considering applying for a mortgage or a remortgage for current home within the next 12 months, NI and RoI, January 2021
                                                                                                                                                                                            • Younger consumers more open to prospect of mortgage application
                                                                                                                                                                                              • Figure 42: Consumers who are not considering applying for a mortgage or a remortgage for current home within the next 12 months, by age and gender, NI and RoI, January 2021
                                                                                                                                                                                            • Consumers based in cities less resistant to idea of mortgage application
                                                                                                                                                                                              • Figure 43: Consumers who are not considering applying for a mortgage or a remortgage for current home within the next 12 months, by area, NI and RoI, January 2021
                                                                                                                                                                                            • Social class and working status influence likelihood to be considering
                                                                                                                                                                                              • Figure 44: Consumers who are not considering applying for a mortgage or a remortgage for current home within the next 12 months, by employment status and social class, NI and RoI, January 2021
                                                                                                                                                                                            • Confidence around financial situation a major factor in consideration
                                                                                                                                                                                              • Figure 45: Consumers who are not considering applying for a mortgage or a remortgage for current home within the next 12 months, by expectation for how financial situation will change over coming 12 months, NI and RoI, January 2021
                                                                                                                                                                                          • Sources of Advice

                                                                                                                                                                                              • Adviser from own bank most common source of advice
                                                                                                                                                                                                • Figure 46: Type of professional adviser used as main source of advice when last arranged new mortgage product/remortgage on main home, NI and RoI, January 2021
                                                                                                                                                                                              • Most consumers obtain advice from banks/building societies
                                                                                                                                                                                                • Figure 47: Type of professional adviser used as main source of advice when last arranged new mortgage product/remortgage on main home, NI and RoI, January 2021
                                                                                                                                                                                            • Mortgage Behaviours

                                                                                                                                                                                                • 4 in 10 actively monitoring market for better deal
                                                                                                                                                                                                  • Figure 48: Agreement with selected statements about mortgages, NI and RoI, January 2021
                                                                                                                                                                                                • Younger consumers most inclined to have researched new deals
                                                                                                                                                                                                • Concerns and Affordability

                                                                                                                                                                                                    • Significant minority concerned over Brexit impact on house price
                                                                                                                                                                                                      • Figure 49: Agreement with selected statements about mortgages, NI and RoI, January 2021
                                                                                                                                                                                                    • More than half of 18-24s have experienced increase in repayments
                                                                                                                                                                                                      • Young, low-earners forced to apply for mortgage holidays
                                                                                                                                                                                                      • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                                                                        • Data sources
                                                                                                                                                                                                          • Generational cohort definitions
                                                                                                                                                                                                            • Abbreviations

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