Table of Contents
Issues in the Market
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- Key themes in the report
- Definition
- Abbreviations
Insights and Opportunities
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- Remortgaging opportunities
- Higher-risk opportunities exist
- Ready for the upturn
Market in Brief
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- Mortgage market adjusts to new paradigm
- Supplyside pressures squeezing the market…
- …as is weakening demand
- Low lending rates a protective factor?
- The target market
- Consumer trends
- Going forward
Fast Forward Trends
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- Trend 1: Staying Connected
- What's it about?
- What we've seen
- Specifics
- What next?
- Trend 2: Stress Society
- What's it about?
- What we've seen
- Specifics
- What next?
Internal Market Environment
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- Key points
- Supplyside concerns exist
- A smaller marketplace
- Fewer products available
- Liquidity and viability concerns persist
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- Figure 1: NI and RoI bank losses 2009
- Continued dependence on government support
- Credit standards tightening
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- Figure 2: Change and expected change in house purchase credit standards (last three months/next three months), RoI, January 2007-April 2010
- Figure 3: Change in house purchase terms and conditions (last three months), RoI, January 2007-April 2010
- Regulatory pressures building
- Defaults on the rise
- Lending rates a stabilising factor
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- Figure 4: Mortgage lending rate and base rate, UK, November 2007-May 2010
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- Figure 5: Outstanding and new mortgage lending rates, RoI, January 2009-May 2010
- Consumer demand for mortgage weakens
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- Figure 6: Demand for household secured lending, UK, Q2 2007-Q2 2010
- Figure 7: Demand for household secured lending, RoI, January 2007-April 2010
Broader Market Environment
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- Key points
- Housing bubble to deflate further?
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- Figure 8: House and retail prices indices, NI and UK, Q1 1987-Q1 2010
- Economic growth prospects weak
- Growth will be jobless and not mortgage-friendly
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- Figure 9: High growth scenario – forecast key economic Indicators, RoI (2009), 2009-20
- Consumers worse off since recession
- Consumer confidence remains weak
- Population growth and smaller household sizes a longer-term positive?
- RoI population projections may adjust
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- Figure 10: Projected population, RoI, 2006-41
- Ageing population associated with more outright owners
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- Figure 11: Projected population, by age band, NI, 2008-46
- Decreasing household size contributing to market growth
Competitive Context
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- Key points
- Investors’ market reduced
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- Figure 12: Buy-to-let mortgage values and volumes, RoI, Q1 2008-Q1 2010
- No place like home
- Reluctant renters waiting to return
- Mortgage-free wannabes
Strengths and Weaknesses
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- Strengths
- Weaknesses
Who’s Innovating?
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- Key points
- Negative Equity mortgages
- Protection against falling house prices
- Family offset mortgages
Market Size and Forecast
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- Key points
- Market continues to shrink
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- Figure 13: Value of outstanding mortgage debt, RoI, NI and all Ireland, 2004-10
- Market outlook remains bleak
- RoI
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- Figure 14: Number and value of mortgage loans approved, RoI, 2005-15
- NI
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- Figure 15: Number and value of mortgage loans approved, NI, 2005-15
Market Segmentation
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- Key points
- Will first-time buyers save the day?
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- Figure 16: Segmentation of the mortgage market, by value, RoI, 2006-09
- Figure 17: Number of mortgage loans approved, by buyer type, NI, 2005-09
- Switchers’ market remains important
- Dependence on buy-to-let market ends
Companies and Mortgage Products
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- Key points
- Allied Irish Bank (AIB) Group
- Bank of Ireland (BoI) Group
- EBS Building Society
- Group Santander
- Danske Bank Group
- KBC Bank
- Irish Nationwide Building Society
- Permanent TSB
- Ulster Bank
- Halifax Bank of Scotland
- Nationwide
- Barclays/Woolwich
Channels to Market
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- Key points
- Borrowers going direct
- Face-to-face business is best
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- Figure 20: Banking/personal finance activities conducted online, NI and RoI, September 2009
Consumer Ownership
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- Key points
- Mortgage ownership adjusts
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- Figure 21: Mortgage ownership, NI and RoI, 2004-09
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- Figure 22: Mortgage ownership taken out in the last 12 months, NI and RoI, 2004-09
- Mortgage equity withdrawal on the increase
- Variable rates attractive to borrowers
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- Figure 23: Proportion of adults with tracker mortgages, NI and RoI, 2005-09
- Is repay the only way?
- Borrowers are demographically diverse
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- Figure 24: Mortgage ownership, by socio-economic group, NI and RoI, 2009
Consumer Motivation
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- Key points
- Mortgages a captive market
- Consumers increasingly averse to debt…
- …but more borrowers are extending their loans
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- Figure 25: Proportion of borrowers having increased mortgage value since first taken out, RoI, 2004-09
- Savvy customers challenge lenders
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- Figure 26: Agreement with selected statements relating to finance, NI and RoI, 2007-09
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- Figure 27: Agreement with the statement ‘I look with interest at advertising for financial services’, NI and RoI, 2007-09
Consumer Target Groups
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- Key points
- NI target groups
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- Figure 28: Consumer typologies, NI, 2009
- Blasé Borrowers
- Astute Parents
- Financially Unsure Fledglings
- Mature Debtors
- RoI target groups
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- Figure 29: Consumer typologies, RoI, 2009
- Canny Nesters
- Uncertain Singles
- Savvy Seniors
- Blasé Borrowers
Appendix
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- Market segmentation
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- Figure 30: Segmentation of the mortgage market, by volume, RoI, 2006-09
- Consumer ownership
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- Figure 31: Mortgage ownership, by demographic breakdown, NI, 2009
- Figure 32: Mortgage ownership, by demographic breakdown, RoI, 2009
- Consumer target groups
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- Figure 33: Consumers who agree with various statements relating to finance, by consumer typologies, NI, 2009
- Figure 34: Consumer typologies, by demographic breakdown, NI, 2009
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- Figure 35: Consumers who agree with various statements relating to finance, by consumer typologies, RoI, 2009
- Figure 36: Consumer typologies, by demographic breakdown, RoI, 2009
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