Today saw the release of some timely information relating to the residential mortgage market in Ireland. The figures were released by the Irish Banking Federation in conjunction with Price Waterhouse Coopers.
One of the more interesting pieces of data released shows that mortgage switches now make up 17.4% of new mortgage lending. This has been driven by the following:
- increased customer sophistication amongst customers in relation to their mortgage rate
- increased media coverage of the competition amongst lenders for new mortgage business
- sizeable advertising spend by several key lenders in respect of mortgage switcher products, e.g. the “Switch and Save” campaign launched by Halifax / Bank of Scotland or the free legal fees campaigns run by several lenders including EBS
As could be expected, the figures report an overall drop of 25% over the last 12 months in respect of new mortgage lending with just €9 billion lent in the third quarter of 2007. However, the overall book of Irish mortgage business continues to grow and now stands at €136 billion.
The first time buyer segment makes up 19.1% of all new lending but this must be expected to fall further as many first time buyers sit on their hands and await further developments in the housing market before commiting to buying their first home. Further downward pressure will come from the new restrictions being placed in recent weeks in respect of the lending criteria on 100% mortgages with only state employees and professional grades continuing to be welcomed with open arms by lenders offering 100% loans.
