Table of Contents
Executive Summary
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- The market
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- Figure 1: Value of outstanding mortgage debt, € billion, RoI and NI, 2009-13
- Forecast
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- Figure 2: Index of value of outstanding mortgage debt, forecast and projected, 2009-18
- Market factors
- Signs of recovery in NI and RoI property markets
- Extremely high rate of arrears among RoI mortgage accounts
- FTBs benefitting from greater affordability and prudence
- Increased first-time buyer volume and value in NI, but down in RoI
- Increased volume and value of mover purchase mortgages
- Companies and Innovations
- The consumer
- Relatively high mortgage penetration among Irish consumers
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- Figure 3: Ownership of a mortgage, RoI and NI, January 2014
- One in five NI and 14% of RoI consumers have mortgage intentions for 2014
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- Figure 4: Consumer intentions to apply/re-apply for a mortgage within the next 12 months, RoI and NI, January 2014
- NI consumers slightly more positive about mortgage prospects
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- Figure 5: Agreement with statements relating to current situation, RoI and NI, January 2014
- Preference for dealing with bank rather than broker or adviser
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- Figure 6: Agreement with statements relating to arranging a mortgage, RoI and NI, January 2014
- Preference for lower interest over no arrangement fee
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- Figure 7: Agreement with statements relating to arrangement fees, RoI and NI, January 2014
- Fixed rate mortgages more popular among NI consumers
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- Figure 8: Agreement with statements relating to fixed rates, RoI and NI, January 2014
- Little enthusiasm for switching providers
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- Figure 9: Agreement with statements relating to switching mortgage provider, RoI and NI, January 2014
- One in ten hopes to make overpayments on their mortgage
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- Figure 10: Agreement with statement, 'I am planning to make overpayments on my mortgage during the next 12 months', RoI and NI, January 2014
- What we think
Issues in the Market
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- What are mortgage ownership levels among Irish consumers?
- What are Irish consumers' mortgage application intentions for the months ahead?
- What are Irish consumers' general attitudes towards mortgages and mortgage-related issues?
Trend Applications
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- Trend: Return to the Experts
- Trend: Prepare for the Worst
- Trend: Why Buy
Market Overview
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- Key points
- Signs that property prices have bottomed-out and are set to rise
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- Figure 11: Residential property price index, RoI, 2005-2014*
- Rental yields in RoI back to a level to attract investors
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- Figure 12: Gross rental yields, by region, RoI, Q4 2013
- Growing interest among RoI consumers in buying a house
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- Figure 13: What are consumers saving for, RoI, February 2013 and February 2014
- Mortgage arrears remain a major problem in RoI
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- Figure 14: Mortgage accounts in arrears for more than 90 days, principal dwelling house, RoI, September 2009 – December 2013
- Unemployment not the main cause of mortgage arrears
- 27% of buy-to-let mortgages in RoI are currently in arrears
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- Figure 15: Buy-to-Let mortgage accounts, by arrears category, RoI, Q4 2013
- Almost 85,000 PDH mortgage accounts have been restructured in RoI
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- Figure 16: Restructured PDH mortgage accounts, by restructure type, RoI, Q4 2013
- Arrears and repossessions in UK declining – but not in NI
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- Figure 17: Mortgage arrears of at least 2.5% of mortgage balance, UK, 2011-2013
- Affordability higher in NI than elsewhere in UK
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- Figure 18: Average first-time buyer loan amount, UK, Q4 2013
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- Figure 19: Multiples of income borrowed by FTBs on average, UK, Q4 2013
- Average FTB mortgage loan amount down 37% from peak in RoI
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- Figure 20: Average mortgage loan amount, first-time buyers, RoI, 2005-2013
- Concerns over interest-only mortgage shortfall in NI
Competitive Context
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- Key points
- NI rents on the increase, adding impetus to desire to buy
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- Figure 21: Rent by property type, Quarterly change, NI, Q2 2013
- Figure 22: Monthly rent by property type, £, NI, Q2 2013
- Rents in RoI also increasing – particularly in Dublin
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- Figure 23: Rental index, RoI, 2004-2014*
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- Figure 24: Private residential rents, Year-on-year % change, by area/region, RoI, January 2014
Market Size and Forecast
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- Key points
- All-Ireland mortgage market up marginally on 2012
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- Figure 25: Value of outstanding mortgage debt, All-Ireland, RoI and NI, actual, forecast and projected, 2009-2018
- RoI caused most of the value drop in the mortgage market
- Moderate growth expected during 2014-2018
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- Figure 26: Value of outstanding mortgage debt, All-Ireland, RoI & NI, forecast and projected, 2009-2018
- Mortgage loan volumes up in NI but down in RoI in 2013
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- Figure 27: Total number of loans advanced for house purchase, NI, Q1 2012-Q4 2013
- Slight decline in number of mortgages issued in RoI in 2013
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- Figure 28: Total number of mortgage loans, RoI, Q4 2011-Q4 2013
- Volume of mortgages since boom years down by 93% in RoI
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- Figure 29: Volume of mortgage loans issued, RoI, 2005-2013
- Value of mortgages up 10% in NI, down 5% in RoI in 2013
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- Figure 30: Total value of loans advanced for house purchase, NI, Q4 2012 – Q4 2013
- Almost €2.5 billion in mortgage loans issued in RoI in 2013
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- Figure 31: Total value of mortgages issued, RoI, Q4 2011-Q4 2013
- Value of mortgages issued in RoI down 5% since peak
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- Figure 32: Value of mortgage loans issued per year, € million, RoI, 2005-2013
Segment Performance
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- Key points
- First-time buyer activity up in NI in 2013, but down in RoI
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- Figure 33: Number of mortgages issued to first-time buyers, NI, Q1 2012-Q4 2013
- Figure 34: First-time buyer mortgages, total value, NI, Q1 2012-Q4 2013
- FTB loans down in volume and value in RoI
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- Figure 35: Number of FTB loans issued, RoI, Q4 2011-Q4 2013
- Figure 36: Value of FTB loans issued, RoI, Q4 2011-Q4 2013
- Volume and value of mover purchase mortgages increase in NI and RoI
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- Figure 37: Number of mortgages advanced to home movers, NI, Q1 2012-Q4 2013
- Figure 38: Value of mortgages advanced to home movers, NI, Q3 2012-Q4 2013
- RoI home mover mortgage segment up 8.5% in volume and 9.8% in value
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- Figure 39: Volume of mover purchase loans issued, RoI, Q4 2011-Q4 2013
- Figure 40: Value of mover purchase loans issued, RoI, Q4 2011-Q4 2013
- Volume steady – but value down – in buy-to-let segment
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- Figure 41: Volume of Residential Investment Letting loans issued, RoI, Q4 2011-Q4 2013
- Figure 42: Value of Residential Investment Letting loans issued, RoI, Q4 2011-Q4 2013
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- Figure 43: Value of residential investment letting loans issued, per annum, RoI, 2006-2013
Strengths and Weaknesses
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- Strengths
- Weaknesses
Companies and Innovations
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- Key points
- Innovations
- AIB and IMHO homeowners in difficulty initiative
- Approved Mortgage Corporation App
- Halifax to pay first-time buyer stamp duty
- Company profiles
- Allied Irish Bank (AIB)
- Bank of Ireland
- Danske Bank
- Halifax
- HSBC
- KBC Bank Ireland
- Nationwide
- Permanent TSB
- Santander Group
- Ulster Bank
The Consumer – Ownership of Mortgages
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- Key points
- More than a third of all Irish consumers have a mortgage
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- Figure 44: Ownership of a mortgage, RoI and NI, January 2014
- Ownership highest among consumers aged 35-44
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- Figure 45: Ownership of a mortgage, by age, RoI and NI, January 2014
- Work and social status have big impact on mortgage ownership
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- Figure 46: Ownership of a mortgage, by work status and socio-economic background, RoI and NI, January 2014
- Majority of mortgage owners are repaying capital and interest
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- Figure 47: Type of mortgage owned, RoI and NI, January 2014
- RoI consumers on variable/tracker rates; NI consumers on fixed rates
The Consumer – Mortgage Application Intentions
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- Key points
- Fairly strong mortgage intentions (particularly in NI)
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- Figure 48: Consumer intentions to apply/re-apply for a mortgage within the next 12 months, RoI and NI, January 2014
- Strongest activity likely to come from first-time buyers
- Similar activity from homeowners looking to move
- Surprisingly strong interest in investing in property
The Consumer – Attitudes towards Mortgages
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- Key points
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- Figure 49: Agreement with statements relating to mortgages, RoI and NI, January 2014
- Less optimism about personal financial situation among RoI consumers
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- Figure 50: Agreement with statements relating to current situation, RoI and NI, January 2014
- Slight preference for dealing with bank rather than broker or adviser
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- Figure 51: Agreement with statements relating to arranging a mortgage, RoI and NI, January 2014
- Consumers have long-term perspective on mortgage costs
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- Figure 52: Agreement with statements relating to arrangement fees, RoI and NI, January 2014
- Fixed rate mortgages more popular among NI consumers
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- Figure 53: Agreement with statements relating to fixed rates, RoI and NI, January 2014
- Consumers not so keen on switching providers – even with an incentive
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- Figure 54: Agreement with statements relating to switching mortgage provider, RoI and NI, January 2014
- One in ten intent on making overpayments on their mortgages
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- Figure 55: Agreement with statement, 'I am planning to make overpayments on my mortgage during the next 12 months', RoI and NI, January 2014
Appendix
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- NI Toluna data
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- Figure 56: Ownership of a mortgage, by demographics, NI, January 2014
- Figure 57: Type of mortgage owned by consumers, by demographics, NI, January 2014
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- Figure 58: Consumer intentions to apply/ re-apply for a mortgage within the next 12 months, by demographics, NI, January 2014
- Figure 59: Agreement with statements relating to mortgages, by demographics, NI, January 2014
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- Figure 60: Agreement with statements relating to mortgages, by demographics, NI, January 2014 (continued)
- Figure 61: Agreement with statements relating to mortgages, by demographics, NI, January 2014 (continued)
- RoI Toluna data
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- Figure 62: Ownership of a mortgage, by demographics, RoI, January 2014
- Figure 63: Type of mortgage owned by consumers, by demographics, RoI, January 2014
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- Figure 64: Consumer intentions to apply/ re-apply for a mortgage within the next 12 months, by demographics, RoI, January 2014
- Figure 65: Agreement with statements relating to mortgages, by demographics, RoI, January 2014
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- Figure 66: Agreement with statements relating to mortgages, by demographics, RoI, January 2014 (continued)
- Figure 67: Agreement with statements relating to mortgages, by demographics, RoI, January 2014 (continued)
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