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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- No better time to buy?
- Online mortgage applications remain low
- Boomerang generation slow to enter mortgage market
Market in Brief
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- Mortgage market still suffering
- More mortgage holders enter arrears
- Rental market benefiting
- Variable rate mortgages see most ownership
Fast Forward Trends
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- Trend 1: Totophobia
- What’s it about?
- What we’ve seen
- What next?
- Trend 2: Why Buy
- What’s it about?
- What we’ve seen
- What next?
Internal Market Environment
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- Key points
- Subdued interest rates
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- Figure 1: Official Bank of England and European Central Bank interest rates, October 2008-December 2011
- Banks failing to pass on the savings
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- Figure 2: Official Bank of England interest rates, European Central Bank Interest rates and effective mortgage rates, October 2008-December 2010
- Banks expecting higher deposits
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- Figure 3: Number of mortgage products available to the UK/NI market, by required deposit, 2009 and 2011
- Higher costs putting off first-time buyers
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- Figure 4: Mortgage deposit as a proportion of price, by type of borrower, UK, 1990-2011
- Higher deposits changing the demographics of first-time buyers
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- Figure 5: First property with mortgage, by age, NI and RoI, 2009 and 2011
- FSA cancels mortgage rejection legislation
- Number of properties in arrears continues to grow in 2011
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- Figure 6: Residential mortgage arrears, repossessions and restructures statistics, December 2010-September 2011
- Those with SVR mortgages more at risk of arrears
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- Figure 7: Mortgage holders behind in payments or in arrears, by type of mortgage, RoI, 2011
- A third of Irish homeowners have negative equity
- Negative equity could last a lifetime
- Help at hand for struggling consumers
- Complaints about mortgages increase between 2007 and 2010
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- Figure 8: Complaints received about mortgages and mortgage products, UK and RoI, 2007-11
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- Figure 9: Complaints received about mortgages and mortgage products, by type of complaint, RoI, 2010
- New EU legislation for the mortgage markets in RoI and UK
Broader Market Environment
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- Key points
- 2011 sees housing prices decline further
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- Figure 10: House price index, NI and RoI, 2005-11
- NI housing market experienced bigger drop
- Economic outlook will continue to hamper the mortgage market
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- Figure 11: Economic outlook, RoI and NI, 2009-11
- Eurozone troubles take their toll on consumers’ confidence.
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- Figure 12: Consumer Sentiment/Confidence Index, UK (inc NI) and RoI, October 2008-October 2011
- Unemployment continues to rise throughout 2011
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- Figure 13: Unemployment rates, RoI and NI, July 2009-September 2011
- Average salaries fail to keep pace with cost of living
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- Figure 14: Median gross weekly pay, NI and RoI, 2006-11
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- Figure 15: Issues concerning consumers, RoI and NI, 2011
Competitive Context
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- Key points
- UK buy-to-let market recovering in recession, RoI still declining
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- Figure 16: Volume and value of buy-to-let mortgages, UK and RoI, 2007-10
- NI rental rates increase from 2009, despite declining house prices
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- Figure 17: Citylets.co.uk rental index, NI, January 2008-September 2011
- RoI rent rates somewhat stabilised
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- Figure 18: National rental index, RoI, January 2007-October 2011
Strengths and Weaknesses
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- Strengths
- Weaknesses
Who’s Innovating?
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- Key points
- NI mortgage lenders may face competition from NAMA
- UK banks offer ‘switch and fix’
- Northern Bank takes steps to stimulate the NI mortgage market
- Incentive for consumers with tracker mortgages
- Mates mortgages
Market Size and Forecast
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- Key points
- Mortgage market floundering in recession
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- Figure 19: Value of outstanding mortgage debt, RoI, NI and all Ireland, 2005-16
- RoI segment accounts for the high loss in value
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- Figure 20: What consumers intend to spend money on in the next 12 months, NI and RoI, June 2011
- NI outstanding debt value increased in 2011
- RoI mortgage approval rates drop 88% between 2006 and 2011
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- Figure 21: Number and value of mortgage loans approved, RoI, 2005-16
- NI mortgage approvals also weak in 2011
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- Figure 22: Number and value of mortgage loans approved, NI, 2005-16
- First-time buyers account for a bigger percentage of the RoI mortgage market
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- Figure 23: Segmentation of the mortgage market, by value, RoI, 2006-11
Companies and Products
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- Allied Irish Bank (AIB) Group
- Bank of Ireland (BoI) Group
- Santander Group
- Danske Bank Group
- National Irish Bank (NIB)
- Northern Bank
- KBC Bank
- Permanent TSB
- Ulster Bank
Channels to Market
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- Key points
- Irish consumers prefer to go direct
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- Figure 24: How mortgage was arranged, NI and RoI, 2007-11
- Consumers still seek mortgage advice
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- Figure 25: Agreement with the statement ‘I usually consult a professional financial adviser before deciding on financial matters’, NI and RoI, 2007-11
- Only 1% arrange mortgages online
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- Figure 26: How mortgage was arranged, NI and RoI, 2011
The Consumer – Mortgage Ownership
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- Key points
- Mortgage ownership stagnates
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- Figure 27: Mortgage ownership, NI and RoI, 2004-11
- Mortgage ownership highest among 35-44s
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- Figure 28: Mortgage ownership, by age, NI and RoI, 2011
- Few consumers take the mortgage plunge in 2011
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- Figure 29: Mortgage ownership taken out in the last 12 months, NI and RoI, 2007-11
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- Figure 30: When mortgage was first taken out, NI and RoI, 2011
- Joint mortgage the most common
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- Figure 31: Person whose name the mortgage is under, NI and RoI, 2011
- Demand for joint mortgages set to rise in RoI, but fall in NI
- Irish consumers opt for variable rate mortgages
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- Figure 32: Type of mortgage rate, by demographics, NI, 2007-11
- Drive for value sees consumers turn to tracker mortgages
- Consumers pay off between €375 and €1,049 per month
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- Figure 33: Monthly mortgage repayments, NI and RoI, 2011
- Paying back more each month
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- Figure 34: Selected monthly mortgage repayments, NI and RoI, 2010 and 2011
- Irish consumers less willing to change their mortgage
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- Figure 35: Changes made to mortgage, NI and RoI, 2007-11
The Consumer – Attitudes towards Finance
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- Key points
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- Figure 36: Agreement with statements relating to finance, NI and RoI, 2011
- Debt worries plague Irish consumers
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- Figure 37: Agreement with statement ‘I don't like the idea of being in debt’, NI and RoI, 2007-11
- Irish consumers deep in thought
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- Figure 38: Agreement with statement ‘Before making any big outlay, I think about it for a while’, by age, NI and RoI, 2011
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- Figure 39: Agreement with statement ‘I am more aware of personal finance than I used to be’, NI and RoI, 2007-11
- RoI consumers more likely to save for things
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- Figure 40: Agreement with statement ‘If there's something I want I save up for it’, NI and RoI, 2007-11
- Where did the trust go?
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- Figure 41: Agreement with statement ‘I trust banks/building societies to look after my money’, NI and RoI, 2009-11
- NI consumers a little more trusting
Appendix
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- NI – Mortgage usage tables
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- Figure 42: Currently have mortgage, by demographics, NI, 2011
- Figure 43: Person whose name the mortgage is under, by demographics, NI, 2011
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- Figure 44: When mortgage was first taken out, by demographics, NI, 2011
- Figure 45: How long ago that mortgage was taken out, by demographics, NI, 2011
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- Figure 46: Type of mortgage owned, NI, 2007-11
- Figure 47: Type of mortgage rate, NI, 2007-11
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- Figure 48: First property with mortgage, by demographics, NI, 2011
- Figure 49: Monthly mortgage repayments, by demographics, NI, 2011
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- Figure 50: Consumers who have changed their mortgage account, NI, 2011
- Figure 51: Increased value of mortgage since first taken out, by demographics, NI, 2011
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- Figure 52: How mortgage was arranged, NI, 2007-11
- RoI – Mortgage usage tables
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- Figure 53: Currently have mortgage, by demographics, RoI, 2011
- Figure 54: Person whose name the mortgage is under, by demographics, RoI, 2011
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- Figure 55: When mortgage was first taken out, by demographics, RoI, 2011
- Figure 56: How long ago that mortgage was taken out, by demographics, RoI, 2011
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- Figure 57: Type of mortgage owned, RoI, 2007-11
- Figure 58: Type of mortgage rate, RoI, 2007-11
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- Figure 59: First property with mortgage, by demographics, RoI, 2011
- Figure 60: Monthly mortgage repayments, by demographics, RoI, 2011
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- Figure 61: Consumers who have changed their mortgage account, RoI, 2007-11
- Figure 62: Increased value of mortgage since first taken out, by demographics, RoI, 2011
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- Figure 63: How mortgage was arranged, RoI, 2007-11
- NI finance statements
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- Figure 64: Agreement with statements relating to finance, by demographics, NI, 2011
- Figure 65: Agreement with statements relating to finance (continued), by demographics, NI, 2011
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- Figure 66: Agreement with statements relating to finance (continued), by demographics, NI, 2011
- Figure 67: Agreement with statements relating to finance (continued), by demographics, NI, 2011
- RoI finance statements
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- Figure 68: Agreement with statements relating to finance, by demographics, RoI, 2011
- Figure 69: Agreement with statements relating to finance (continued), by demographics, RoI, 2011
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- Figure 70: Agreement with statements relating to finance (continued), by demographics, RoI, 2011
- Figure 71: Agreement with statements relating to finance (continued), by demographics, RoI, 2011
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