Table of Contents
Executive Summary
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- The impact of COVID-19 on the mortgage market
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- 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
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- 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
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- 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
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- 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
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- 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
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- 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
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- 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
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- 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
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- 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
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- Figure 10: Agreement with selected statements about mortgages, NI and RoI, January 2021
- Brexit still a concern for significant minority in NI and RoI
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- Figure 11: Agreement with selected statements about mortgages, NI and RoI, January 2021
- What we think
The Market – Key Takeaways
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- 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
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- Short-, medium- and long-term impact on the industry
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- Figure 12: Short-, medium- and long-term impact of COVID-19 on mortgage loans, March 2021
- Outstanding mortgage debt down over 2% in 2020
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- 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
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- Figure 14: Index of outstanding mortgage debt, actual, estimated, forecast and projected, IoI, RoI and NI, 2016-25
Market Drivers
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- Around 1 in 4 experienced permanent or temporary unemployment
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- 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
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- Figure 16: Consumers who had savings prior to COVID-19 outbreak and consumers who have savings currently, NI and RoI, January 2021
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- 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
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- Figure 18: How consumers rate their own financial situation, NI and RoI, January 2021
- Most consumers positive about financial prospects over coming year
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- 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
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- 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
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- Figure 22: Number of residential property sales in Northern Ireland, NI, 2010-20
- RoI house prices similarly defy COVID-19 disruptions
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- 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
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- Figure 25: Index of private housing rental prices, UK, 2015-20*
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- Figure 26: Average rent by region, £ per month, NI, H1 2020
- Figure 27: National rent index, RoI, 2007-20
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- 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
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- 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
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- 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
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- 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?
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- NatWest introduces green mortgages
- New scheme set to help lenders offer 95% mortgages
- Companies increase support for consumers
Company profiles
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- 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
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- 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
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- More than one third of Irish consumers have a mortgage
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- 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
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- 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'
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- 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
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- Majority of borrowers have a fixed-rate mortgage loan
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- 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
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- 26% in NI, 16% in RoI on deal that will expire within the next year
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- 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
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- 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
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- Figure 39: When consumers’ current mortgage deal is due to expire, RoI, January 2021
- Half intend seeking new deal with existing provider after expiration
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- Figure 40: Likely behaviour when current mortgage deal expires, RoI and NI, January 2021
Future Intentions
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- One in five consumers intend applying for mortgage or remortgage
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- 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
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- 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
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- 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
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- 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
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- 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
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- Adviser from own bank most common source of advice
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- 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
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- 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
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- 4 in 10 actively monitoring market for better deal
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- 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
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- Significant minority concerned over Brexit impact on house price
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- 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
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- Data sources
- Generational cohort definitions
- Abbreviations
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